Overlapping ownership in a unionized oligopoly

Gökhan Can ()
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Gökhan Can: Università Cattolica del Sacro Cuore

Economics Bulletin, 2025, vol. 45, issue 3, 1441 - 1450

Abstract: This paper analyzes the effects of overlapping ownership in a unionized Cournot duopoly with decreasing returns to labor. Firms partially internalize rivals' profits, and wage rates are set by firm-level unions that maximize total wage bills. An increase in overlapping ownership always increases producer surplus but lowers total union utility through a reduction in equilibrium wage rates. When products are close substitutes, both consumer surplus and social welfare exhibit a U-shaped relationship with respect to the degree of overlapping ownership. By contrast, when products are not close substitutes, overlapping ownership lowers consumer surplus and social welfare.

Keywords: Overlapping ownership; Unionized oligopoly; Decreasing returns to labor; Cournot competition; Product differentiation (search for similar items in EconPapers)
JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2025-09-30
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