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Anti-competitive effects of partial cross-ownership: Experimental evidence

W. Hariskos, M. Königstein and Konstantinos Papadopoulos ()

Journal of Economic Behavior & Organization, 2022, vol. 193, issue C, 399-409

Abstract: In theory, partial cross-ownership affects product prices and consumer welfare negatively, but empirical evidence is highly controversial. For competition policy it is important whether such effects are substantial enough to cause action. We report a lab experiment on a Cournot duopoly with symmetric passive cross-ownership in which we increase the degree of cross-ownership from 10% (treatment LOW) to 40% (treatment HIGH). We find an increase in price that is substantial enough to be considered problematic from an anti-trust perspective. In addition we show that part of the price increase is caused by increasing collusion.

Keywords: Cross–ownership; Common ownership; Minority shareholdings; Silent financial interest; Cournot experiment (search for similar items in EconPapers)
JEL-codes: C91 D43 L22 L41 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.jebo.2021.11.027

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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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