Passive Cross-Holding in a Stackelberg Oligopoly

Ma Hongkun () and Chenhang Zeng
Additional contact information
Ma Hongkun: Zhuhai Huafa Investment Holdings Co. Ltd., Zhuhai, 519031, China

The B.E. Journal of Theoretical Economics, 2022, vol. 22, issue 2, 431-452

Abstract: We show that bilateral cross-holding can be profitable for firms with symmetric technologies in a Stackelberg oligopoly. Furthermore, if firms involved in cross-holding obtain a strategic advantage to be the leaders (i.e. Stackelberg leadership through cross-holding), such cross-holding will improve both consumer surplus and social welfare. We also discuss robustness of our main results with respect to convex costs and product differentiation.

Keywords: cross-holding; Stackelberg leadership; incentive; welfare (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/bejte-2020-0041 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejtec:v:22:y:2022:i:2:p:431-452:n:12

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejte/html

DOI: 10.1515/bejte-2020-0041

Access Statistics for this article

The B.E. Journal of Theoretical Economics is currently edited by Burkhard C. Schipper

More articles in The B.E. Journal of Theoretical Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().