Production in incomplete markets: expectations matter for political stability

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Standard

Production in incomplete markets : expectations matter for political stability. / Crès, Hervé; Tvede, Mich.

I: Journal of Mathematical Economics, Bind 45, Nr. 3-4, 2009, s. 212-222.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Harvard

Crès, H & Tvede, M 2009, 'Production in incomplete markets: expectations matter for political stability', Journal of Mathematical Economics, bind 45, nr. 3-4, s. 212-222. https://doi.org/10.1016/j.jmateco.2008.09.005

APA

Crès, H., & Tvede, M. (2009). Production in incomplete markets: expectations matter for political stability. Journal of Mathematical Economics, 45(3-4), 212-222. https://doi.org/10.1016/j.jmateco.2008.09.005

Vancouver

Crès H, Tvede M. Production in incomplete markets: expectations matter for political stability. Journal of Mathematical Economics. 2009;45(3-4):212-222. https://doi.org/10.1016/j.jmateco.2008.09.005

Author

Crès, Hervé ; Tvede, Mich. / Production in incomplete markets : expectations matter for political stability. I: Journal of Mathematical Economics. 2009 ; Bind 45, Nr. 3-4. s. 212-222.

Bibtex

@article{d97f09f01f8011de9f0a000ea68e967b,
title = "Production in incomplete markets: expectations matter for political stability",
abstract = "In the present paper we study voting-based corporate control in a general equilibrium model with incomplete financial markets. Since voting takes place in a multi-dimensional setting, super-majority rules are needed to ensure existence of equilibrium. In a linear-quadratic setup we show that the endogenization of voting weights (given by portfolio holdings) can give rise to - through self-fulfilling expectations - dramatical political instability, i.e. Condorcet cycles of length two even for very high majority rules.",
keywords = "Faculty of Social Sciences, super majority voting, self-fulfilling expectations",
author = "Herv{\'e} Cr{\`e}s and Mich Tvede",
note = "JEL classification: D21, D52, D71, D72",
year = "2009",
doi = "10.1016/j.jmateco.2008.09.005",
language = "English",
volume = "45",
pages = "212--222",
journal = "Journal of Mathematical Economics",
issn = "0304-4068",
publisher = "Elsevier",
number = "3-4",

}

RIS

TY - JOUR

T1 - Production in incomplete markets

T2 - expectations matter for political stability

AU - Crès, Hervé

AU - Tvede, Mich

N1 - JEL classification: D21, D52, D71, D72

PY - 2009

Y1 - 2009

N2 - In the present paper we study voting-based corporate control in a general equilibrium model with incomplete financial markets. Since voting takes place in a multi-dimensional setting, super-majority rules are needed to ensure existence of equilibrium. In a linear-quadratic setup we show that the endogenization of voting weights (given by portfolio holdings) can give rise to - through self-fulfilling expectations - dramatical political instability, i.e. Condorcet cycles of length two even for very high majority rules.

AB - In the present paper we study voting-based corporate control in a general equilibrium model with incomplete financial markets. Since voting takes place in a multi-dimensional setting, super-majority rules are needed to ensure existence of equilibrium. In a linear-quadratic setup we show that the endogenization of voting weights (given by portfolio holdings) can give rise to - through self-fulfilling expectations - dramatical political instability, i.e. Condorcet cycles of length two even for very high majority rules.

KW - Faculty of Social Sciences

KW - super majority voting

KW - self-fulfilling expectations

U2 - 10.1016/j.jmateco.2008.09.005

DO - 10.1016/j.jmateco.2008.09.005

M3 - Journal article

VL - 45

SP - 212

EP - 222

JO - Journal of Mathematical Economics

JF - Journal of Mathematical Economics

SN - 0304-4068

IS - 3-4

ER -

ID: 11711487