COMMISSION-REVENUE MAXIMATION IN A GENERAL EQUILIBRIUM-MODEL OF ASSETCREATION

A general equilibrium model of endogenous asset formation is given in which a monopolistic agent, called the designer, can create any types of assets and charage commissions as long as the total number of the t ypes of assets does not exceed some given constant. When the designer can create at most two assets, a commission-revenue maximizer always e xists. Otherwise, it may not. Moreover, the so-called epsilon-maximize rs may be badly behaved. A (profit) maximizer may not exist even when the number of types of assets is endogenously determined from a positi ve fixed cost of creating an asset. Journal of Economic Literature Cla ssification Numbers: D52, D80. (C) 1995 Academic Press, Inc.