Common Ownership, Corporate Control and Price Competition

Abstract

We examine price competition with homogeneous products in the presence
of general common ownership arrangements allowing for different corporate control structures. We show that equilibria with positive profits exist (including the
monopoly outcome) when the manager places the same weight on the profi of her firm as on the average profit of all the other firms. This condition supports symmetric and asymmetric stakes and can arise as an equilibrium of a network formation game or a bargaining process.