Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/54962 
Year of Publication: 
2011
Series/Report no.: 
ZEW Discussion Papers No. 11-071
Publisher: 
Zentrum für Europäische Wirtschaftsforschung (ZEW), Mannheim
Abstract: 
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 noncontrolling 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.
Subjects: 
differentiated products
separation of ownership and control
private benefits of control
JEL: 
L13
L41
Document Type: 
Working Paper

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