This paper studies the free entry competitive equilibria of a labor managed economy when there are less than complete contingent claims markets. First, we prove the existence of a simple labor management equilibrium which is inefficient in the Diamond sense. Second, we introduce an insurance...

Based on an entrepreneurial model having historical roots in Knight (1921), a competitive general equilibrium theory of the firm under uncertainty is constructed. The expected utility maximization criterion is used and justified by assuming that for each firm there is an expected utility...