The recent literature on firm behavior has been characterized by two contrasting strands of analysis: on the one hand, there is the literature attempting to extend the conventional maxims of profit maximization of competitive firms from the familiar static models to dynamic contexts and into situations of uncertainty. These analyses argue that firms should maximize their stock market value and explore the implications of this for firm behavior. On the other hand, there is the vast and growing "managerial" literature, in which other objectives, such as "satisficing," "sales maximizing," and "maximization of the manager's utility functions" are postulated. The second group of analyses criticize the first as being unrealistic, while the first argues that it provides the best "first approximation" to firm behavior: if firms did not maximize their stock market value, or deviated far from value maximization, someone would attempt to take them over, change the course of action of the firm, and make a pure capital gain. This paper presents a unified framework for analyzing firm behavior which can be used to reconcile these divergent views.

This paper investigates the conditions under which a can find a set of prices and a set of products that are sustainable against competitive entry. By a natural monopoly we mean an industry whose cost function over some given set of products is such that no combination of several firms can produce an industry output vector as cheaply as it can be provided by a single supplier. A sustainable vector is a stationary equilibrium set of product quantities and prices which does not attract rivals into the industry. Even if a vector is not sustainable, a monopoly may still be able to protect itself from entry by changing its prices whenever and however necessary, in response to any entry that threatens at that moment. But, by definition, only a sustainable vector can prevent entry and yet remain stationary.

Investigates the conditions under which a 'natural monopoly' can find a set of prices and a set of products that are sustainable against competitive entry. Ramsey rule for Pareto optimal pricing under a budget constraint; Relation between subadditivity of costs and sustainability; Conditions sufficient for sustainable prices; Uncertainty of sustainability. (Из Ebsco)

NUMEROUS MARKETS ARE characterized by informational differences between buyers and sellers. In financial markets, informational asymmetries are particularly pronounced. Borrowers typically know their collateral, industriousness, and moral rectitude better than do lenders; entrepreneurs possess "inside" information about their own projects for which they seek financing.