Common Ownership, Corporate Control and Price Competition

24 Pages Posted: 18 Feb 2021 Last revised: 18 Apr 2022

See all articles by Anna Bayona

Anna Bayona

ESADE Business School

Ángel L. López

Autonomous University of Barcelona

Anton-Giulio Manganelli

EADA Business School; CRES-UPF

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

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JEL Classification: L11, L40, G34

Suggested Citation

Bayona, Anna and López, Ángel L. and Manganelli, Anton-Giulio, Common Ownership, Corporate Control and Price Competition (February 11, 2021). Available at SSRN: https://ssrn.com/abstract=3784072 or http://dx.doi.org/10.2139/ssrn.3784072

Anna Bayona (Contact Author)

ESADE Business School ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

Ángel L. López

Autonomous University of Barcelona ( email )

Plaça Cívica
Cerdañola del Valles
Barcelona, Barcelona 08193
Spain

Anton-Giulio Manganelli

EADA Business School ( email )

CIF ESG08902645
C/ Aragó 204
Barcelona, CP 08011
Spain

CRES-UPF ( email )

Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain

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