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We study internalization of production externalities in perfectly competitive markets where production plans are decided by majority voting. Since shareholders want firms to maximize dividends of portfolios rather than profits, they are interested in some internalization. Two governances, namely...

In the present paper we study voting-based corporate control in a general equilibrium model with incomplete financial markets. Since voting takes place in a multi-dimensional setting, super-majority rules are needed to ensure existence of equilibrium. In a linear–quadratic setup we show that...

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Experts are asked to provide their advice in a situation of uncertainty. They adopt the decision maker’s utility function, but each has a potentially different set of prior probabilities, and so does the decision maker. The decision maker and the experts maximize the minimal expected utility...

The head of an organization is viewed as dealing with an optimization problem under a variety of constraints. The bureaucracy, by contrast, is viewed as dealing with the constraints alone: it has to make a multitude of low-level decisions, in such a way that no constraint is violated. However,...

When aggregating individual preferences through the majority rule in an n-dimensional spatial voting model, the ‘worst-case’ scenario is a social choice configuration where no political equilibrium exists unless a super-majority rate as high as 1 — 1/(n+1) is adopted. In this paper we...

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