Overlapping ownership, endogenous quality, and welfare
Autor(a) principal: | |
---|---|
Data de Publicação: | 2019 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.14/29265 |
Resumo: | This paper investigates how overlapping ownership affects quality levels, consumer surplus, firms' profits and welfare when the industry is a vertically differentiated duopoly and quality choice is endogenous. This issue is particularly relevant since recent empirical evidence suggests that overlapping ownership constitutes an important feature of a multitude of vertically differentiated industries. We show that overlapping ownership while detrimental for welfare, may increase or decrease the quality gap, consumer surplus and firms' profits. In particular, when the overlapping ownership structure is such that the high quality firm places a positive weight on the low quality firm's profits, the incentives of the high quality firm to compete aggressively reduce. This may increase the equilibrium quality of the low quality firm, which in turn may lead to higher consumer surplus, despite higher prices. |
id |
RCAP_fca36c7a8cde7bebba93869cd88ce303 |
---|---|
oai_identifier_str |
oai:repositorio.ucp.pt:10400.14/29265 |
network_acronym_str |
RCAP |
network_name_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository_id_str |
7160 |
spelling |
Overlapping ownership, endogenous quality, and welfareOverlapping ownershipVertical differentiationThis paper investigates how overlapping ownership affects quality levels, consumer surplus, firms' profits and welfare when the industry is a vertically differentiated duopoly and quality choice is endogenous. This issue is particularly relevant since recent empirical evidence suggests that overlapping ownership constitutes an important feature of a multitude of vertically differentiated industries. We show that overlapping ownership while detrimental for welfare, may increase or decrease the quality gap, consumer surplus and firms' profits. In particular, when the overlapping ownership structure is such that the high quality firm places a positive weight on the low quality firm's profits, the incentives of the high quality firm to compete aggressively reduce. This may increase the equilibrium quality of the low quality firm, which in turn may lead to higher consumer surplus, despite higher prices.ElsevierVeritati - Repositório Institucional da Universidade Católica PortuguesaBrito, DuarteRibeiro, RicardoVasconcelos, Helder2020-01-15T14:55:48Z20192019-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.14/29265engBrito, D., Ribeiro, R., Vasconcelos, H. (2019). Overlapping Ownership, Endogenous Quality, and Welfare. Endogenous Quality, and Welfare (November 27, 2019)10.2139/ssrn.3494482info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-12T17:34:48Zoai:repositorio.ucp.pt:10400.14/29265Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T18:23:29.445315Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Overlapping ownership, endogenous quality, and welfare |
title |
Overlapping ownership, endogenous quality, and welfare |
spellingShingle |
Overlapping ownership, endogenous quality, and welfare Brito, Duarte Overlapping ownership Vertical differentiation |
title_short |
Overlapping ownership, endogenous quality, and welfare |
title_full |
Overlapping ownership, endogenous quality, and welfare |
title_fullStr |
Overlapping ownership, endogenous quality, and welfare |
title_full_unstemmed |
Overlapping ownership, endogenous quality, and welfare |
title_sort |
Overlapping ownership, endogenous quality, and welfare |
author |
Brito, Duarte |
author_facet |
Brito, Duarte Ribeiro, Ricardo Vasconcelos, Helder |
author_role |
author |
author2 |
Ribeiro, Ricardo Vasconcelos, Helder |
author2_role |
author author |
dc.contributor.none.fl_str_mv |
Veritati - Repositório Institucional da Universidade Católica Portuguesa |
dc.contributor.author.fl_str_mv |
Brito, Duarte Ribeiro, Ricardo Vasconcelos, Helder |
dc.subject.por.fl_str_mv |
Overlapping ownership Vertical differentiation |
topic |
Overlapping ownership Vertical differentiation |
description |
This paper investigates how overlapping ownership affects quality levels, consumer surplus, firms' profits and welfare when the industry is a vertically differentiated duopoly and quality choice is endogenous. This issue is particularly relevant since recent empirical evidence suggests that overlapping ownership constitutes an important feature of a multitude of vertically differentiated industries. We show that overlapping ownership while detrimental for welfare, may increase or decrease the quality gap, consumer surplus and firms' profits. In particular, when the overlapping ownership structure is such that the high quality firm places a positive weight on the low quality firm's profits, the incentives of the high quality firm to compete aggressively reduce. This may increase the equilibrium quality of the low quality firm, which in turn may lead to higher consumer surplus, despite higher prices. |
publishDate |
2019 |
dc.date.none.fl_str_mv |
2019 2019-01-01T00:00:00Z 2020-01-15T14:55:48Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.14/29265 |
url |
http://hdl.handle.net/10400.14/29265 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Brito, D., Ribeiro, R., Vasconcelos, H. (2019). Overlapping Ownership, Endogenous Quality, and Welfare. Endogenous Quality, and Welfare (November 27, 2019) 10.2139/ssrn.3494482 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Elsevier |
publisher.none.fl_str_mv |
Elsevier |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
repository.mail.fl_str_mv |
|
_version_ |
1799131942509084672 |