Asset Ownership and Market Structure in Oligopoly
AbstractWe study the effects of changes in the ownership or productive assets in a concentrated industry. Using a Cournot model, we analyze (1) investment by an oligopolist, (2) the sale of capital goods by one oligopolist to another, and (3) stock market purchases, whereby one firm acquires a partial interest in a rival firm. In each case, we determine how the change in asset ownership affects price, profits, industry performance, and measured concentration. We identify those industry conditions and asset transactions for which equilibrium increases in concentration reliably indicate worsened industry performance.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 21 (1990)
Issue (Month): 2 (Summer)
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Web page: http://www.rje.org
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