Input price discrimination with passive partial ownership

Cross Ownership, Loan Commitment, Managerial Delegation and the 'Prisoner’s Dilemma'

“…Note that on the one hand, in terms of cross ownership, some studies focus on the emergence of implicit collusion between managerial firms and examine the possibility of cross ownership resulting in collusion (Spagnolo, 2005;Gilo et al 2006), and others investigate the welfare effect of cross ownership under different ownership structure (Chen et al 2021;Hu et al 2021;Lestage, 2021;Li and Shuai, 2022;Alipranti et al 2022;Sun and Wang, 2022). On the other hand, the literature on strategic managerial delegation has grown significantly since the seminal contributions of Vickers (1985), Fershtman (1985), Fershtman andJudd (1987), andSklives (1987) (VFJS for shot), the outcome is that the sale delegation in Cournot market will lead to the "Prisoner's Dilemma" situation.…”

Vertical cross‐ownership, double marginalization, and social welfare

“…They show that common ownership may improve welfare when competition in the downstream market is weak. Hu et al (2022) showed that in a vertically related market with downstream passive crossownership, passive cross-ownership may weaken the negative effect of higher input price on consumer and social welfare. Li and Shaui (2022) demonstrated that the manufacturer holding the rival's shares will receive a lower price due to price discrimination, mitigating the anticompetitive effect of horizontal shareholding.…”