In this paper, the authors consider a multi-period rational expectations model in which risk-averse investors differ in their information on past transaction prices (the ticker). Some investors (insiders) observe prices in real-time whereas other investors (outsiders) observe prices with a delay.

This article investigates the determinants of boards’ financial expertise using a sample of 95 non-financial French listed firms.

A theory of incomplete preferences under uncertainty is proposed, according to which a decision maker’s preferences are indeterminate if and only if her confidence in the relevant beliefs does not match up to the stakes involved in the decision. The author uses the model of confidence in...

In this paper, we use the investment fraud of Bernard Madoff to inquire into the production of trust in the context of financial markets. Drawing upon empirical data related to U.S. individual investors (interviews and letters) as well as documentary material, we investigate the mechanisms...

In exchange economies where moral hazard affects the distribution of individual risks, we study the viability of linear nonexclusive contracts. It is shown that the linearity in prices and payoffs is compatible with the presence of moral hazard when coupled with a simple participation fee. More...

In this paper the existence of unemployment is partly explained as being the result of coordination failures. It is shown that as a result of self-fulfilling pessimistic expectations, even at Walrasian prices, a continuum of equilibria results, among which an equilibrium with approximately no...

We study an economy with competitive commodity markets and exclusive pairwise contractual relations with moral hazard, where both the principal and the agent can be risk averse. We show existence of equilibria and their generic constrained suboptimality, by means of a change in the compensation...

In a simple parametric general equilibrium model with S states of nature and K < S firms - and thus potentially incomplete markets-, rates of super majority rule p€[1/2, 1] are computed which guarantee the existence of p -majority stable production equilibria : within each firm, no alternative production plan can rally a proportion bigger than p of the shareholders, or shares (depending on the governance), against the equilibrium. The smallest p are obtained for announced production plans whose span contains the ideal consumptions of all K mean shareholders. This is done under various governances. These rates of super majority are shown to be always smaller than Caplin and Nalebuff (1988, 1991) bound of 1-1/e ~ 0.64. Moreover, simple majority production equilibria are shown to exist for any initial distribution of types when K=S-1, and for symmetric distributions of types as soon as K > S/2. Finally, through parametric examples, these rates are shown to decrease with the homogeneity of the shareholders' beliefs on the probabilities of the states of nature, and to increase with the shareholders'...</s>

An economy with two dates is considered, on state at the first date and a finite number of states at the last date. Shareholders determine production plans b voting -one share, one vote- and at r-majority stable equilibria, alternative production plans are supported by at most rx100 percent of...

In absence of markets for externalities, the authors look for governances and conditions under which majority voting among shareholders is likely to give rise to efficient internalization. The central and natural role played by a governance of stakeholders is underlined and benchmarked.