Abstract
We analyze the limit behavior of sequences of oligopolistic equilibria in which firms follow objectives consistent with their shareholders’ interests. We show that convergence to a competitive outcome may fail for some distributions of firms’ shares across consumers and provide a characterization of the class of ownership structures that lead to Walrasian equilibrium allocations in the limit.
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We greatly benefited from the discussions with Jan Werner, Beth Allen, Andrew McLennan, and Andreu Mas-Colell, as well as the participants of the MathEcon workshop at the University of Minnesota and the Economic Theory Workshop at HEC, Paris, France. We also thank an anonymous referee for very useful comments.
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Bejan, C., Bidian, F. Ownership structure and efficiency in large economies. Econ Theory 50, 571–602 (2012). https://doi.org/10.1007/s00199-010-0585-3
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DOI: https://doi.org/10.1007/s00199-010-0585-3