Competition in a stock market with small firms (Q1106070)

Certain economic phenomena are commonly attributed to a lack of competition. Reversely, their absence can be considered as a minimal requirement for any notion of perfect competition. In particular, both disagreement of shareholders on the objectives of a firm and suboptimality of equilibria are often explained by insufficient competition in the stock market. Therefore one might require that a perfectly competitive stock market implies shareholder unanimity and optimality of equilibria. The paper studies a mean-variance model of a competitive stock market where shareholder unanimity and existence and optimality of equilibrium can be shown.