Arbeitspapier
Incentives and Risk Sharing in a Stock Market Equilibrium
Economists hold two opposing views of the stock market: one focuses on the negative effect on incentives of separating ownership and control, the other emphasizes its beneficial role for risk sharing. Using a generalization of Diamond''s model which incorporates the effect of entrepreneurial incentives, we show how these two views can be reconciled. We introduce the concept of a stock market equilibrium with rational competitive price perceptions (RCPP) and show that such and equilibrium leads to a constrained optimal trade-off between risk sharing and incentives. We give examples showing the difference between RCPP equilibria and the standard CAPM type equilibria of finance.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 96-12
- Classification
-
Wirtschaft
- Event
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Geistige Schöpfung
- (who)
-
Quinzii, Martine
Magill, Michael
- Event
-
Veröffentlichung
- (who)
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University of California, Department of Economics
- (where)
-
Davis, CA
- (when)
-
1996
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Quinzii, Martine
- Magill, Michael
- University of California, Department of Economics
Time of origin
- 1996
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