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A Model of Endogenous Cross-Holdings in Oligopoly |
Cheng-Zhong Qin1(), Dandan Zhu2(), Shengping Zhang3() |
1. Department of Economics, University of California, Santa Barbara, CA 93106-9210, USA 2. Department of Economics, University of California, Santa Barbara, CA 93106-9210, USA 3. Guanghua School of Management, Peking University, Beijing 100871, China |
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Abstract A network approach is proposed to analyze the formation of cross-holdings and anti-competitive implications. Our approach is motivated by the bilateral arrangement of passive ownership between Microsoft and Apple in 1997. We provide a complete characterization of pairwise stable cross-holdings for a model of Cournot oligopoly with a homogeneous product. Our results strengthen the competitive implications of endogenous cross-holdings in Cournot oligopoly found in the literature.
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Keywords
cross-holding
Cournot equilibrium
oligopoly
pairwise stability
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Issue Date: 19 September 2017
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