On the Stability of Common Ownership Arrangements

Charistos Konstantinos ()
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Charistos Konstantinos: Department of Economics, 37796 University of Ioannina , Ioannina, Greece

The B.E. Journal of Economic Analysis & Policy, 2025, vol. 25, issue 3, 807-818

Abstract: We investigate the stability of common ownership arrangements. In a duopolistic market, the owner of a firm acquires a non-controlling share in the rival firm. Then, the acquirer of the minority share considers reselling the share to an investor. Common ownership is stable and the acquirer retains part of the share when there is asymmetry in the production costs of the firms. Common ownership is more likely to be stable as the initially acquired share increases. The welfare effects of the stable common ownership scheme depend also on the cost-asymmetry.

Keywords: common ownership; passive investments; stability (search for similar items in EconPapers)
JEL-codes: D43 L13 L41 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1515/bejeap-2024-0236

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