EconPapers    
Economics at your fingertips  
 

Private Benefits and Product Market Competition

Jacques Thépot ()

Recherches économiques de Louvain, 2013, vol. 79, issue 3, 5-24

Abstract: The impact of private benefits extraction on the values of oligopolistic firms is analyzed. Private benefits are assumed to generate costs which are passed through the organizational structure and create price distortion in the downstream product market. We prove that this may affect the profit (i.e. the market value) of the firms in a positive sense since the intensity of rivalry is curbed by the cost increase. In oligopoly, private benefits extraction may enhance the profits while still generating a welfare loss: this suggests that corporate governance cannot be divorced from competition policy in industries where managerial opportunism generates expropriation costs. JEL Classification: G38, D43.

Keywords: private benefits; oligopoly; agency cost (search for similar items in EconPapers)
JEL-codes: G38 D43 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.cairn.info/load_pdf.php?ID_ARTICLE=REL_793_0005 (application/pdf)
http://www.cairn.info/revue-recherches-economiques-de-louvain-2013-3-page-5.htm (text/html)
free

Related works:
Working Paper: Private Benefits and Product Market Competition (2013) Downloads
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:cai:reldbu:rel_793_0005

Access Statistics for this article

More articles in Recherches économiques de Louvain from De Boeck Université
Bibliographic data for series maintained by Jean-Baptiste de Vathaire ().

 
Page updated 2020-03-29
Handle: RePEc:cai:reldbu:rel_793_0005