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Private benefits and market competition


  • Jacques Thépot

    () (LaRGE Research Center, Université de Strasbourg)


This paper deals with corporate governance issues and competition policy. The impact of private benefits extraction on the values of oligopolistic firms is analyzed. Private benefits are assumed to generate costs which create price distortion on the product market. For a wide range of industry concentrations, we prove that this may affect the profit (i.e. the value) of the firms in a positive sense since the intensity of rivalry is reduced by the price distortion. Antitrust implications are discussed. In oligopoly, private benefits extraction may enhance the profits while still generating a welfare loss: this suggests that corporate governance cannot be divorced from competiton policy in industries where managerial opportunism generates operating costs.

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  • Jacques Thépot, 2010. "Private benefits and market competition," Working Papers of LaRGE Research Center 2010-16, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
  • Handle: RePEc:lar:wpaper:2010-16

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