Strategic Behavior of Firms in Incomplete Markets

In general equilibrium models with incomplete markets, decisions of firms determine the possible transfers of consumption across time and states of the world. This gives the firm market power. However, strategic behavior of firms is still one of the greatest research gaps in general equilibrium theory. The focus of this project is on firms with multiple marketable contracts, such as financial intermediaries or companies with different forms of finance. The aim is to model oligopolistic competition between such firms in a general equilibrium framework. This includes the study of existence, properties, and optimality of equilibrium. In particular, the set of offered contracts and the real effects on decisions of individuals shall be analyzed. Besides consumption decisions this includes strategic acquisition of shares to gain influence in the firm.

Principal investigators
Zierhut, Michael PhD (Details) (Business Administration)

Further project members
Stomper, Alexander Prof. Dr. (Details) (Business Administration)

DFG: Eigene Stelle (Sachbeihilfe)

Duration of project
Start date: 10/2017
End date: 09/2020

Research Areas
Economic Theory

Zierhut, M. (2019): Nonexistence of Constrained Efficient Production Plans. Journal of Mathematical Economics. DOI:

Zierhut, M. (2020): Generic Regularity of Differentiated Product Oligopolies. Economic Theory. DOI:

Zierhut, M. (2020): Indeterminacy of Cournot-Walras Equilibrium with Incomplete Markets. Economic Theory. DOI:

Last updated on 2022-08-09 at 15:05