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Free Entry under Common Ownership

Susumu Sato and Toshihiro Matsumura ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates the equilibrium and welfare properties of free entry under common ownership. We formulate a model in which incumbents under common ownership choose whether to enter a new market. We find that an increase in common ownership reduces entries, which may or may not improve welfare. Welfare has an inverted-U shaped relationship with the degree of common ownership. However, if firms do not have common ownership before the entry, after entry common ownership harms welfare.

Keywords: Overlapping ownership; Free entry, Insufficient entry, Excessive entry, Circular markets (search for similar items in EconPapers)
JEL-codes: L13 L22 (search for similar items in EconPapers)
Date: 2019-12-11
New Economics Papers: this item is included in nep-cfn, nep-com, nep-mic and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:97525

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