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The Competitive Effects of Common Ownership: Economic Foundations and Empirical Evidence: Reply

8 Pages Posted: 30 Sep 2017  

José Azar

University of Navarra, IESE Business School

Martin C. Schmalz

University of Michigan, Stephen M. Ross School of Business; CEPR; CESifo

Isabel Tecu

Charles River Associates (CRA)

Date Written: September 28, 2017

Abstract

Kennedy, O’Brien, Song, and Waehrer (2017) replicate the panel results of Azar, Schmalz and Tecu (forthcoming), but argue on theoretical grounds that the estimates should not be interpreted as anti-competitive effects of common ownership. They then develop and estimate alternative models and find no significant positive effects of common ownership on airline ticket prices. This note points out features of their empirical analysis that cast doubt on the reliability of their method and results. Their conclusion that the data do not support AST’s interpretation seems unwarranted.

Keywords: Competition, Ownership, Diversification, Pricing, Antitrust, Governance, Product Market

JEL Classification: L41, L10, G34

Suggested Citation

Azar, José and Schmalz, Martin C. and Tecu, Isabel, The Competitive Effects of Common Ownership: Economic Foundations and Empirical Evidence: Reply (September 28, 2017). Available at SSRN: https://ssrn.com/abstract=3044908

José Azar

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

Martin Schmalz (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan St
R5456
Ann Arbor, MI 48109-1234
United States
7347630304 (Phone)

HOME PAGE: http://https://sites.google.com/site/martincschmalz/

CEPR ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

CESifo ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Isabel Tecu

Charles River Associates (CRA) ( email )

1201 F. St. NW
Ste. 700
Washington, DC 20004
United States

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