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In this paper we investigate the anti-competitive effects of partial horizontal ownership in a setting where: (i) two cost-asymmetric firms compete a la Cournot; (ii) managers deal with eventual conflicting interests of the different shareholders by maximizing a weighted sum of the two firms' operating profits; and (iii) weights result from the corporate control structure of the firm they run. Within this theoretical structure, we find that if the manager of the more efficient firm weights the operating profit of the (inefficient) rival more than its own profit, then partial ownership will lessen competition more than a monopoly when both firms produce. (C) 2019 Elsevier B.V. All rights reserved.

Using the coefficient of cooperation, we analyse the effect of cost asymmetries on collusive agreements when firms are able to coordinate on distinct output levels than the unrestricted joint profit maximization outcome. In this context, we first investigate the extent to which collusive agreements are feasible. Secondly, we focus on collusion sustainability in an infinitely repeated game. We show that, regardless of the degree of cost asymmetry, at least some collusion is always sustainable. Finally, the degree of collusion is also endogeneised to show that cooperation has an upper bound determined by the most inefficient firm. Usando el coeficiente de cooperación, analizamos el efecto de las asimetrías en costes en los acuerdos colusorios cuando las empresas son capaces de coordinarse en niveles de producción distintos de aquel que maximiza el beneficio conjunto. En este contexto, primero investigamos en qué medida son factibles los acuerdos colusorios. En segundo lugar, nos centramos en la sostenibilidad de la colusión en un juego repetido infinitos periodos. Se demuestra que, independientemente del grado de asimetría en costes, al menos cierto nivel de colusión siempre es sostenible. Finalmente, también se obtiene el grado de colusión endógeno para demostrar que la cooperación tiene un límite superior determinado por la empresa más ineficiente. Financial support by the “Ministerio de Economía y Competitividad” and the “Fondo Europeo de Desarrollo Regional” through their projects “Conflicto e influencia estratégica: Los efectos de la actividades de captación de rentas en las decisiones colectivas” (Ref: ECO2015-67901-P MINECO/FEDER) and “Strategic management on complex systems with multiplicity of agents” (Ref: MTM2014-54199-P) are gratefully acknowledged.

It is well known that unilateral R&D spillovers hamper domestic firms׳ incentives to invest in innovations and thus have likely adverse effects for domestic welfare. However, when tacit collusion between foreign and domestic firms is likely, R&D spillovers may encourage monopoly pricing and therefore may have an additional detrimental impact on domestic welfare, especially on consumer surplus. Tariff protection could address this problem by altering firms׳ cost efficiency distribution and, thus, by inducing tougher market competition. Consumers benefit from the tariff policy, and governments that assign a high enough weight to the consumer surplus set positive tariff levels. Under protection domestic firms׳ innovation level remains the same as under free trade but the average industry efficiency increases.

This paper investigates the production decisions of polluting and green firms, and how their profits are affected by environmental regulation. We demonstrate that emission fees entail a negative effect on firms profits, since they increase unit production costs. However, fees can also produce a positive effect for a relatively inefficient firm, given that environmental regulation ameliorates its cost disadvantage. If such a disadvantage is sufficiently large, we show that the positive effect dominates, thus leading this firm to actually favor the introduction of environmental policy, while relatively efficient firms oppose regulation. Furthermore, we show that such support can not only originate from green firms but, more surprisingly, also from polluting companies.

Many convicted cartels have a leader which is substantially larger than its rivals. In a setting where firms face indivisible costs of collusion, we show that: (i) firms may have an incentive to merge so as to create asymmetric market structures since this enables the merged firm to cover the indivisible cost associated with cartel leadership; and (ii) forbidding mergers leading to symmetric market structures can induce mergers leading to asymmetric market structures with a higher risk of collusion. Thus, these results have implications for the practice of the current EU and US merger policies.

In their merger control, EU and the US have considered symmetric size distribution (cost structure) of firms to be a factor potentially leading to collusion. We show that forbidding mergers leading to symmetric market structures can induce mergers leading to asymmetric market structures with higher risk of collusion, when firms face indivisible costs of collusion. In particular, we show that if the rule determining the collusive outcome has the property that the large (efficient) firm benefits sufficiently more from collusion when industry asymmetries increase, collusion can become more likely when firms are moderately asymmetric.

This paper shows how competing firms can facilitate tacit collusion by making passive investments in rivals. In general, the incentives of firms to collude depend in a complex way on the whole set of partial cross ownership (PCO) in the industry. We show that when firms are identical, only multilateral PCO may (but need not) facilitate tacit collusion. A firm?s controller can facilitate tacit collusion further by investing directly in rival firms and by diluting his stake in his own firm. In the presence of cost asymmetries, even unilateral PCO by efficient firms in a less efficient rival can facilitate tacit collusion.

In their merger control, EU and the US have considered symmetric size distribution (cost structure) of firms to be a factor potentially leading to collusion. We show that forbidding mergers leading to symmetric market structures can induce mergers leading to asymmetric market structures with higher risk of collusion, when firms face indivisible costs of collusion. In particular, we show that if the rule determining the collusive outcome has the property that the large (efficient) firm benefits sufficiently more from collusion when industry asymmetries increase, collusion can become more likely when firms are moderately asymmetric.

International audience; Assuming a fixed-proportion downstream production technology, partial forward integration by an upstream monopolist may be observed whether the monopolist is advantaged or disadvantaged cost-wise relative to fringe firms in the downstream market. Integration need not induce cost-predation and the profits of the fringe may increase. The output price falls and welfare unambiguously rises.

We examine an entry-deterrence model in the commons. We investigate in which contexts the presence of asymmetric information among the fi?rms exploiting the commons becomes welfare improving, relative to complete information, and in which settings an uninformed regulator might have incentives to assess and disseminate the available stock among potential entrants. Cost asymmetries; Entry Deterrence; Signaling; Commons; Welfare