Passive partial ownership, sneaky takeovers, and merger control. (English) Zbl 1310.91085
Summary: We analyze the impact of passive partial ownership (PPO) on horizontal mergers. We show that antitrust authorities ignoring the effects of previous PPO acquisitions invite sneaky takeovers: a PPO is strategically used prior to a full takeover to get a merger approved which is in fact detrimental to consumers.
MSC:
| 91B38 | Production theory, theory of the firm |
| 91B54 | Special types of economic markets (including Cournot, Bertrand) |
References:
| [1] | Bresnahan, T. F.; Salop, S. C., Quantifying the competitive effects of production joint ventures, Internat. J. Indus. Org., 4, 155-175 (1986) |
| [4] | Farrell, J.; Shapiro, C., Horizontal mergers: an equilibrium analysis, Amer. Econ. Rev., 80, 107-126 (1990) |
| [5] | Foros, O.; Kind, H. J.; Shaffer, G., Mergers and partial ownership, Eur. Econ. Rev., 55, 916-926 (2011) |
| [6] | Gaudet, G.; Salant, S. W., Increasing the profits of a subset of firms in oligopoly models with strategic substitutes, Amer. Econ. Rev., 81, 658-665 (1991) |
| [7] | Gilo, D., The anticompetitive effect of passive investment, Michigan Law Rev., 99, 1-47 (2000) |
| [8] | Gilo, D.; Moshe, Y.; Spiegel, Y., Partial cross ownership and tacit collusion, Rand J. Econ., 37, 81-99 (2006) |
| [9] | Grossman, S. J.; Hart, O. D., Takeover bids, the free-rider problem, and the theory of the corporation, Bell J. Econ., 11, 42-64 (1980) |
| [10] | Malueg, D. A., Collusive behavior and partial ownership of rivals, Internat. J. Indus. Org., 10, 27-34 (1992) |
| [11] | O’Brien, D. P.; Salop, S. C., Competitive effects of partial ownership: financial interest and corporate control, Antitrust Law J., 67, 559-614 (2000) |
| [14] | Reynolds, R. J.; Snapp, B. R., The competitive effects of partial equity interests and joint ventures, Internat. J. Indus. Org., 4, 141-153 (1986) |
| [15] | Shapiro, C., Theories of oligopoly behavior, (Schmalensee, R.; Willig, R., Handbook of Industrial Organization, vol. 1 (1989), Elsevier: Elsevier Amsterdam), 329-414 |
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. In some cases that data have been complemented/enhanced by data from zbMATH Open. This attempts to reflect the references listed in the original paper as accurately as possible without claiming completeness or a perfect matching.
