Authors: Konstantinos Papadopoulos, Wasilios Hariskos, Manfred Koenigstein

Title: Anti-Competitive Effects of Silent Financial Interests: Experimental Evidence

Abstract

Theoretical models predict negative effects of silent financial interests on product prices and consumer welfare, but empirical evidence is highly controversial. We report a lab experiment on a homogeneous duopoly market with symmetric passive cross-ownership in which the degree of cross-ownership varies between treatments (LOW or HIGH). For competition policy it is important whether such effects are substantial enough to cause action. In the experiment we indeed observe substantial negative effects which would be considered problematic in real markets.