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Can Partial Horizontal Ownership Lessen Competition More Than a Monopoly?

Duarte Brito, Ricardo Ribeiro and Helder Vasconcelos ()

No 2, Working Papers de Economia (Economics Working Papers) from Católica Porto Business School, Universidade Católica Portuguesa

Abstract: In this paper we investigate the anti-competitive effects of partial horizontal ownership in a setting where: (i) two cost-asymmetric firms compete à la Cournot; (ii) managers deal with eventual conflicting interests of the different shareholders by maximizing a weighted sum of firms operating profits; and (iii) weights result from the corporate control structure of the firm they run. Within this theoretical structure, we find that if the manager of the more efficient firm weights the operating profit of the (inefficient) rival more than its own profit, then partial ownership can lessen competition more than a monopoly.

Keywords: Partial Horizontal Ownership; Common-Ownership; Cross-Ownership; Full Joint Ownership; Duopoly; Cost Asymmetry (search for similar items in EconPapers)
JEL-codes: L11 L12 L13 L41 L50 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2018-12
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
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http://www.feg.porto.ucp.pt/docentes/repec/WP/0220 ... zontal_ownership.pdf First version (application/pdf)

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Journal Article: Can partial horizontal ownership lessen competition more than a monopoly? (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:cap:wpaper:022018

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