Ownership and Control in a Competitive Industry

Heiko Karle, Tobias Klein and Konrad O. Stahl

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: We study a differentiated product market in which an investor initially owns a controlling stake in one of two competing firms and may acquire a non-controlling or a controlling stake in a competitor, either directly using her own assets, or indirectly via the controlled firm. While industry profits are maximized within a symmetric two product monopoly, the investor attains this only in exceptional cases. Instead, she sometimes acquires a noncontrolling stake. Or she invests asymmetrically rather than pursuing a full takeover if she acquires a controlling one. Generally, she invests indirectly if she only wants to affect the product market outcome, and directly if acquiring shares is profitable per se.

Keywords: Differentiated products; separation of ownership and control; private benefits of control (search for similar items in EconPapers)
JEL-codes: L13 L41 (search for similar items in EconPapers)
Date: 2011-02
New Economics Papers: this item is included in nep-bec and nep-com
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Citations: View citations in EconPapers (10)

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https://epub.ub.uni-muenchen.de/13204/1/350.pdf (application/pdf)

Related works:
Working Paper: Ownership and Control in a Competitive Industry (2011)
Working Paper: Ownership and Control in a Competitive Industry (2011)
Working Paper: Ownership and Control in a Competitive Industry (2011)
Working Paper: Ownership and Control in a Competitive Industry (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:350

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