Anti-Competitive E ects of Common Ownership

Anti-Competitive Effects of Common Ownership

Jos?e Azar

Martin Schmalz

Isabel Tecu

Charles River Associates University of Michigan Charles River Associates

FTC Microeconomics Conference 2015

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Motivation

Theory: Firms owned by overlapping sets of investors have reduced incentives to compete

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Motivation

Theory: Firms owned by overlapping sets of investors have reduced incentives to compete

Rotemberg (1984); Bresnahan & Salop (1986); Gordon (1990); Gilo (2000); O'Brien & Salop (2000); Gilo et al. (2006)

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Motivation

Theory: Firms owned by overlapping sets of investors have reduced incentives to compete

Rotemberg (1984); Bresnahan & Salop (1986); Gordon (1990); Gilo (2000); O'Brien & Salop (2000); Gilo et al. (2006)

History: JP Morgan

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Motivation

Theory: Firms owned by overlapping sets of investors have reduced incentives to compete

Rotemberg (1984); Bresnahan & Salop (1986); Gordon (1990); Gilo (2000); O'Brien & Salop (2000); Gilo et al. (2006)

History: JP Morgan, 19th century (voting) trusts

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Motivation

Theory: Firms owned by overlapping sets of investors have reduced incentives to compete

Rotemberg (1984); Bresnahan & Salop (1986); Gordon (1990); Gilo (2000); O'Brien & Salop (2000); Gilo et al. (2006)

History: JP Morgan, 19th century (voting) trusts

FTC as an antitrust agency

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Motivation

Theory: Firms owned by overlapping sets of investors have reduced incentives to compete

Rotemberg (1984); Bresnahan & Salop (1986); Gordon (1990); Gilo (2000); O'Brien & Salop (2000); Gilo et al. (2006)

History: JP Morgan, 19th century (voting) trusts

FTC as an antitrust agency Could that also happen today?

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Motivation

Theory: Firms owned by overlapping sets of investors have reduced incentives to compete

Rotemberg (1984); Bresnahan & Salop (1986); Gordon (1990); Gilo (2000); O'Brien & Salop (2000); Gilo et al. (2006)

History: JP Morgan, 19th century (voting) trusts

FTC as an antitrust agency Could that also happen today?

Strong (but unexamined) prior: no

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