Free Entry under Common Ownership
Susumu Sato and
Toshihiro Matsumura ()
MPRA Paper from University Library of Munich, Germany
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)
New Economics Papers: this item is included in nep-cfn, nep-com, nep-mic and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:97525
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