Consider a financial market equilibrium with correlated firms and risk averse investors holding diversified portfolios. When an activist investor has the ability to perform value-enhancing activities in a single firm, and these activities increase with ownership, we show that optimizing behavior...

We consider the model introduced by Dewatripont and Roland (1995) to stufy the desirability of big-bang versus gradualist reform packages for economies in transition.

We analyze the salient features of networks and point out the similarities between the economic structure of networks and the structure of vertically related industries. The analysis focuses on positive consumption and production externalities, commonly called network externalities. We discuss...