A Theorem on the Decentralization of the Objective Function of the Firm in GEI

This paper introduces a separation theorem for a two period general equilibrium model with endogenized asset structures and incomplete income transfer space. This theorem separates the activities of the consumers from the activities of the firms. The result improves on the objective function introduced in Drèze (1974) and Grossman and Hart (1979), which is not independent of an exogenously assigned present value derived from the utilities of the owners of the firm.