By a well-known argument, securities holders do not directly benefit from risk-reducing corporate diversification when they can replicate this difersification on their own. Some have argued that corporate diversification may be of value, or can otherwise be explained by, the agency relationship...

We examine the pricing implications of call externalities, the benefits enjoyed by the recipient of a message sent by another user. We show that, with or without a network-profitability constraint, efficient pricing requires consideration of demands, as well as costs. We present conditions under...