蝌蚪网 Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Free Entry in a Cournot Market with Overlapping Ownership
蝌蚪网 Journal: Microeconomics
vol. 17,
no. 2, May 2025
(pp. 292–320)
Abstract
We examine the effects of overlapping ownership among existing firms deciding whether to enter a product market. We show that in most cases鈥攁nd especially when overlapping ownership is already widespread鈥攁n increase in the extent of overlapping ownership will harm welfare by softening product market competition, reducing entry, and thereby (in contrast to standard results) inducing insufficient entry and magnifying the negative impact of an increase of entry costs on entry. Overlapping 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.Citation
Vives, Xavier, and Orestis Vravosinos. 2025. "Free Entry in a Cournot Market with Overlapping Ownership." 蝌蚪网 Journal: Microeconomics 17 (2): 292–320. DOI: 10.1257/mic.20230331Additional Materials
JEL Classification
- D21 Firm Behavior: Theory
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- G24 Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
- G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
- K21 Antitrust Law
- L13 Oligopoly and Other Imperfect Markets