We model a Cournot industry where a group of firms participate in chain ownership. Each firm owner that participates in the group owns also a small non-controlling share in another firm within the group. We establish an equivalence between chain-ownership and cartel. We also examine the profitability and welfare effects of closed and open chains and compare them to other forms of common ownership.

The axioms underlying Arrow’s impossibility theorem are very restrictive in terms of what can be used when aggregating preferences. Social preferences may not depend on the menu nor on preferences over alternatives outside the menu. But context matters. So we weaken these restrictions to allow for context to be included. The context as we define describes which alternatives in the menu and which preferences over alternatives outside the menu matter. We obtain unique representations. These are discussed in examples involving markets, bargaining and intertemporal well being of an individual. Proofs are constructive and insightful.

The paper is a first attempt at introducing a corrupt tax administration to the model of optimal taxation. The presence of corruption offers the taxpayers a possibility to 'mimic' the income of others by bribing rather than by mimicking labour supply. The government would ideally like to redistribute from high-income earners to low-income earners, which may be prevented by tax evasion that high-income earners bribe the taxman in order to evade taxes. We argue that Pareto optimal taxation preventing tax evasion entails a zero marginal tax rate on high-income earners and a positive marginal tax rate on low-income earners. The key implication of the model is that such optimal tax scheme should impose a higher amount of tax on high-income earners. We also identify the optimal tax scheme where the tax revenue is spent on the government's anti-tax-evasion effort in order to improve the social welfare. Finally, we analyze the roles of the government's effectiveness of fighting against tax evasion and the prevalence of tax evasion in the optimal tax scheme. A higher marginal tax rate on low-income earners may fit countries with widespread tax evasion and less efficient anti-tax-evasion technologies. Improving the government's efficiency fighting against tax evasion would relieve the cost of avoiding tax evasion which falls on low-income earners.

It has been shown that in the non Walrasian context the equivalence between Arrow securities and Contingent markets fails. We show that if we consider Arrow securities which offer a unit 'rate of return' this equivalence is restored. This is also true for any asset structure with fixed 'rates of returns'. Consequently, in the Non Walrasian context there is a dillema between fixing asset payoffs or rates of return.