A Model of Endogenous Cross-Holdings in Oligopoly

Cheng-Zhong Qin; Dandan Zhu; Shengping Zhang

doi:10.3868/s060-006-017-0020-6

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Front. Econ. China ›› 2017, Vol. 12 ›› Issue (3) : 465-479. DOI: 10.3868/s060-006-017-0020-6

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A Model of Endogenous Cross-Holdings in Oligopoly

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Abstract

A network approach is proposed to analyze the formation of cross-holdings and anti-competitive implications. Our approach is motivated by the bilateral arrangement of passive ownership between Microsoft and Apple in 1997. We provide a complete characterization of pairwise stable cross-holdings for a model of Cournot oligopoly with a homogeneous product. Our results strengthen the competitive implications of endogenous cross-holdings in Cournot oligopoly found in the literature.

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cross-holding / Cournot equilibrium / oligopoly / pairwise stability

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Cheng-Zhong Qin, Dandan Zhu, Shengping Zhang. A Model of Endogenous Cross-Holdings in Oligopoly. Front. Econ. China, 2017, 12(3): 465‒479 https://doi.org/10.3868/s060-006-017-0020-6