TY - UNPB
T1 - Ownership and Control in a Competitive Industry
AU - Karle, H.
AU - Klein, T.J.
AU - Stahl, K.O.
PY - 2011
Y1 - 2011
N2 - We 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.
AB - We 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.
KW - Differentiated products
KW - separation of ownership and control
KW - private benefits
M3 - Discussion paper
VL - 2011-013
T3 - TILEC Discussion Paper
BT - Ownership and Control in a Competitive Industry
PB - TILEC
CY - Tilburg
ER -