Publicação
Profit reversal in symmetric ownership structures : a study of Cournot and Bertrand competition
| Resumo: | This paper examines the impact of passive symmetric ownership on market out- comes in Cournot and Bertrand competition within a vertically structured model. The model includes one upstream firm that supplies the same input to two down- stream firms, and focuses on the conditions that lead to profit reversal between the two competition types. Symmetric ownership is analyzed in three configurations: Horizontal Cross-Ownership (HCO), Partial Vertical Forward Ownership (PVFO), and Partial Vertical Backward Ownership (PVBO). The findings reveal that profit reversal at the downstream level only occurs under PVBO, and depends on the ownership share and the degree of product differentiation. Additionally, the study examines profit reversal at both the upstream and industry levels across all configurations. The analysis also explores the impact of ownership structures on consumer welfare and market efficiency, providing strategic insights for firms and practical guidance for regulatory policies in vertically integrated industries. |
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| Autores principais: | Silva, Matilde Maria da Palma Cantinho Ramos |
| Assunto: | Bertrand Cournot Profit reversal Symmetric ownership |
| Ano: | 2025 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso embargado |
| Instituição associada: | Universidade Católica Portuguesa |
| Idioma: | inglês |
| Origem: | Veritati - Repositório Institucional da Universidade Católica Portuguesa |
| Resumo: | This paper examines the impact of passive symmetric ownership on market out- comes in Cournot and Bertrand competition within a vertically structured model. The model includes one upstream firm that supplies the same input to two down- stream firms, and focuses on the conditions that lead to profit reversal between the two competition types. Symmetric ownership is analyzed in three configurations: Horizontal Cross-Ownership (HCO), Partial Vertical Forward Ownership (PVFO), and Partial Vertical Backward Ownership (PVBO). The findings reveal that profit reversal at the downstream level only occurs under PVBO, and depends on the ownership share and the degree of product differentiation. Additionally, the study examines profit reversal at both the upstream and industry levels across all configurations. The analysis also explores the impact of ownership structures on consumer welfare and market efficiency, providing strategic insights for firms and practical guidance for regulatory policies in vertically integrated industries. |
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