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Vives, Xavier
and Vravosinos, Orestis
(2024)
Free entry in a Cournot market with overlapping ownership.
TSE Working Paper, n. 24-1544, Toulouse
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Abstract
We examine the effects of overlapping ownership among existing firms deciding whether to enter a product market. We show that in most cases—and especially when overlapping ownership is already widespread, an increase in the extent of overlapping ownership will harm welfare by softening product market competition, reducing entry, thereby (in contrast to standard results) inducing insufficient entry, and magnifying the negative impact of an increase of entry costs on entry. Overlap-ping ownership can mostly be beneficial only under substantial increasing returns to scale, in which case industry consolidation (induced by overlapping ownership) leads to sizable cost efficiencies.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | June 2024 |
| Place of Publication: | Toulouse |
| JEL Classification: | D43 - Oligopoly and Other Forms of Market Imperfection L11 - Production, Pricing, and Market Structure; Size Distribution of Firms L13 - Oligopoly and Other Imperfect Markets L21 - Business Objectives of the Firm L41 - Monopolization; Horizontal Anticompetitive Practices |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse Capitole |
| Site: | UT1 |
| Date Deposited: | 07 Jun 2024 06:43 |
| Last Modified: | 07 Jun 2024 06:43 |
| OAI Identifier: | oai:tse-fr.eu:129418 |
| URI: | https://publications.ut-capitole.fr/id/eprint/49462 |
