The Anticompetitive Effect of Passive Investment
John M. Olin Center for Law, Economics, and Business, Harvard Law School, Discussion Paper No. 189
Posted: 16 Dec 1996
Date Written: July 1996
The leading antitrust cases provide a de facto exemption for a firm passively investing in its competitor's stock. In contrast, the article presents an economic analysis which shows that even totally passive investments by a firm in its competitor's stock may substantially lessen competition. Accordingly, the article proposes a reconsideration of the current antitrust treatment of such passive investments.
JEL Classification: K21, L41
Suggested Citation: Suggested Citation