OWNERSHIP STRUCTURE, PROFIT MAXIMIZATION, AND COMPETITIVE BEHAVIOR.

Ownership Structure, Profit Maximization, and Competitive Behavior

We question the broad applicability of the assumption of profit maximization as the goal of the firm and investigate how variance in objective functions across different ownership structures affects competitive behavior. While prior work in agency theory has argued that firms may fail to engage in profit maximizing behaviors due to misalignment between the goals of owners and managers, we conte...

Profit Maximization in Perfectly Competitive Markets

EBITA (earnings before interest, taxes, and amortization of intangible assets) has increased at a compound annual rate of 26%. The Class A Common Stock price has grown in value at a compound annual rate of 27%. By effectively implementing our strategies and delivering value, we have achieved one of the strongest growth records in the publishing industry. How does a firm's optimal output choice ...

Ownership Structure and Provider Behavior ∗

In a theoretical model, we study how for-proÞt, nonproÞt, and public providers respond to a prospective payment system (similar to the DRG system used by Medicare in the United States) in a static game when costs are uncertain. For-proÞts default in high-cost states, provide minimum quality in low-cost states, and have a relatively high incentive to invest in cost reduction. Public providers, e...

Customer Selection and Profit Maximization

Profit Maximization and Supermodular Technology

A dataset is a list of observed factor inputs and prices for a technology; profits and production levels are unobserved. We obtain necessary and sufficient conditions for a dataset to be consistent with profit maximization under a monotone and concave revenue based on the notion of cyclic monotonicity. Our result implies that monotonicity and concavity cannot be tested, and that one cannot deci...