Common Ownership, Corporate Control and Price Competition
24 Pages Posted: 18 Feb 2021 Last revised: 18 Apr 2022
Date Written: February 11, 2021
Abstract
We examine price competition with homogeneous products in the presence
of general common ownership arrangements allowing for different corporate control structures. We show that equilibria with positive profits exist (including the
monopoly outcome) when the manager places the same weight on the profi of her firm as on the average profit of all the other firms. This condition supports symmetric and asymmetric stakes and can arise as an equilibrium of a network formation game or a bargaining process.
Keywords: partial ownership, proportional control, silent financial interests, Bertrand competition, minority shareholders
JEL Classification: L11, L40, G34
Suggested Citation: Suggested Citation
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- Usage
- Abstract Views: 865
- Downloads: 190
- Captures
- Readers: 2