Coalition and Victory: The Correlated Equilibria of Shareholder Voting

Abstract

This paper investigates the existence of correlated equilibria of a shareholder voting game. It is shown that there exists a correlated equilibrium component where a minimum winning coalition (MWC) of the supporters of status quo and a dominant shareholder vote with strictly positive probabilities and all other players abstain. This result is dierent from the previous one suggested by Ritzberger (2005) where the solution concept was pure Nash equilibrium and only the dominant shareholder participates in the assembly. This new result suggests a dierent behavior for the manager of a rm in equilibrium.