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Strategic managerial incentives and cross ownership structure: A note

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Abstract

In this note, we study the behavior of firms competing in a Cournot duopoly framework where owners and managers are separate identities and where cross-participation at the ownership level exists. We find that depending on the degree of cross ownership, managerial incentives may be more or less towards profit maximizing behavior. Moreover we show that limited cross-participation may be a way for owners to obtain “collusive behavior” without apparently offending “Anti-Trust” laws.

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Author notes

  1. Inés Macho-Stadler

    Present address: Facultad de Ciencias Económicas (UVP), Dep. de Análisis Económico and I. E. P., Avenida Lehendakari Aguirre 83, E-48015, Bilbao, Spain

  2. Thierry Verdier

    Present address: DELTA, Joint Research Unit CNRS-EHESS-ENS, 48 Bd. Jourdan, F-75014, Paris, France

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    1. Inés Macho-Stadler
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    2. Thierry Verdier
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    Additional information

    We would like to thank M. P. Espinosa, C. Matutes, J. D. Pérez Castrillo, J. Ricart, V. Salas, X. Vives, and an anonymous referee for their comments and suggestions. I. Macho-Stadler's research was partially supported by the project PGV 9022.1. The usual disclaimers apply.

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    Macho-Stadler, I., Verdier, T. Strategic managerial incentives and cross ownership structure: A note. Zeitschr. f. Nationalökonomie 53, 285–297 (1991). https://doi.org/10.1007/BF01227626

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    • DOI: https://doi.org/10.1007/BF01227626

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