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Karle, Heiko
Klein, Tobias J.
Stahl, Konrad O.
Year of Publication: 
Series/Report no.: 
CESifo working paper: Industrial Organisation 3380
We study a differentiated product market in which an investor initially owns a controlling stake in one of two competing firms and may acquire a non-controlling or a controlling stake in a competitor, either directly using her own assets, or indirectly via the controlled firm. While industry profits are maximized within a symmetric two product monopoly, the investor attains this only in exceptional cases. Instead, she sometimes acquires a non-controlling stake. Or she invests asymmetrically rather than pursuing a full takeover if she acquires a controlling one. Generally, she invests indirectly if she only wants to affect the product market outcome, and directly if acquiring shares is profitable per se.
differentiated products
separation of ownership and control
private benefits of control
Document Type: 
Working Paper

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