Recently, a number of papers have noted the dramatic increase in the extent to which institutional investors account for the ownership of publicly-traded stock, including holding ownership stakes in multiple market rivals. This change, in turn, has raised the intriguing or disturbing possibility...

This paper analyzes a class of competitive economies with production, incomplete financial markets, and agency frictions. Firms take their production, financing, and contractual decisions so as to maximize their value under rational conjectures. We show that competitive equilibria exist and that...