In this paper we show that even in incomplete markets a plausible firm objective function may be defined, and that this objective function coincides with the Arrow-Debreu objective function in complete markets. Our major theorem shows that a production plan may be found which will always win the...

In a sequential general equilibrium with a single representative risk--averse consumer, stationary uncertainty, a one-period lag between investment and production, and concave production functions, we show that the forward price of a one-period real default-free bond one period hence is less...