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How much should you own? Cross-ownership and privatization

  • Rupayan Pal

    ()

    (Indira Gandhi Institute of Development Research)

This paper examines the interdependence of cross-ownership and level of privatization in case of differentiated products mixed duopoly. It shows that it is optimal for the private firm not to own any (own the entire) portion of the privatized share of its rival firm, if the level of privatization is very low (very high). In equilibrium, the government makes sure that cross-ownership is not attracted. However, in most of the situations, the possibility of cross-ownership adversely affects the prospect of privatization. Results of this paper have strong implications to antitrust regulations and divestment policies.

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File URL: http://www.igidr.ac.in/pdf/publication/WP-2010-015.pdf
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Paper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2010-015.

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Length: 15 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:ind:igiwpp:2010-015
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  25. Debashis Pal & Mark White, 2003. "Intra-Industry Trade And Strategic Trade Police In The Presence of Public Firms," International Economic Journal, Taylor & Francis Journals, vol. 17(4), pages 29-41.
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  31. repec:ebl:ecbull:v:30:y:2010:i:1:p:309-314 is not listed on IDEAS
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