Passive Cross-Holding in a Stackelberg Oligopoly-Reference-Cited by-同舟云学术

Passive Cross-Holding in a Stackelberg Oligopoly

Published:2021-07-19 Issue:0 Volume:0 Page:
ISSN:1935-1704
Container-title:The B.E. Journal of Theoretical Economics
language:en
Short-container-title:

Author:

Ma Hongkun¹²,Zeng Chenhang³^ORCID

Affiliation:

1. Zhuhai Huafa Investment Holdings Co. Ltd. , Zhuhai , 519031 , China

2. Business School , Sun Yat-sen University , Guangzhou 510275 , China

3. Wenlan School of Business , Zhongnan University of Economics and Law , 182 Nanhu Ave. , Wuhan 430073 , China

Abstract

Abstract We show that bilateral cross-holding can be profitable for firms with symmetric technologies in a Stackelberg oligopoly. Furthermore, if firms involved in cross-holding obtain a strategic advantage to be the leaders (i.e. Stackelberg leadership through cross-holding), such cross-holding will improve both consumer surplus and social welfare. We also discuss robustness of our main results with respect to convex costs and product differentiation.

Publisher

Walter de Gruyter GmbH

Subject

General Economics, Econometrics and Finance

Link

https://www.degruyter.com/document/doi/10.1515/bejte-2020-0041/pdf

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