Ownership and Control in a Competitive Industry
AbstractWe 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.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2011-026.
Date of creation: 2011
Date of revision:
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Differentiated products; separation of ownership and control; private benefits of control;
Other versions of this item:
- Karle, H. & Klein, T.J. & Stahl, K.O., 2011. "Ownership and Control in a Competitive Industry," Discussion Paper 2011-013, Tilburg University, Tilburg Law and Economic Center.
- Karle, Heiko & Klein, Tobias J. & Stahl, Konrad O., 2011. "Ownership and control in a competitive industry," ZEW Discussion Papers 11-071, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Karle, Heiko & Klein, Tobias J. & Stahl, Konrad O., 2011. "Ownership and Control in a Competitive Industry," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 350, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Karle, Heiko & Klein, Tobias & Stahl, Konrad O, 2011. "Ownership and Control in a Competitive Industry," CEPR Discussion Papers 8277, C.E.P.R. Discussion Papers.
- Heiko Karle & Tobias J. Klein & Konrad O. Stahl, 2011. "Ownership and Control in a Competitive Industry," CESifo Working Paper Series 3380, CESifo Group Munich.
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-09 (All new papers)
- NEP-BEC-2011-04-09 (Business Economics)
- NEP-COM-2011-04-09 (Industrial Competition)
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