We examine merger activity and its effect on asset pricing in a firm network economy. Mergers create internal capital … without the superadditivity axiom, which extends the Shapley value, and apply it to the merging activity of firms in a network …. The possibility of a merger increases the equity value of standalone firms. Higher network dep endence generally increases …

small worldnetwork. This paper develops a strategic network formation model where agents haveheterogeneous knowledge of the … network: cognizant agents know the whole network,while ignorant ones are less knowledgeable. For a broad range of parameters … higher betweenness centrality: they are the brokerswho connect di®erent parts of the network. Ignorant agents cause the …

We introduce collective bargaining in a static framework where the firm and its risk-neutralemployees negotiate over … wage-employment contract andthe equilibrium contract under binding risk-neutral efficient bargaining. We also …