Are the Remedies for the Common Ownership Problem Worse than the Disease?: Assessing the Likely Decision and Error Costs of Proposed Antitrust Interventions

Competition Policy International - CPI Antitrust Chronicle on "Common Ownership Revisited", Spring 2019, Volume 2, Number 2

University of Missouri School of Law Legal Studies Research Paper Forthcoming

8 Pages Posted: 4 Jul 2019

See all articles by Thomas A. Lambert

Thomas A. Lambert

University of Missouri - School of Law

Michael E. Sykuta

University of Missouri at Columbia - Division of Applied Social Sciences

Date Written: May 21, 2019

Abstract

Antitrust scholars have recently proposed additional interventions — beyond enforcement of traditional rules on hub-and-spoke conspiracies, collusion- facilitating devices, etc. — to police anticompetitive harms purportedly resulting from institutional investors’ common ownership of small stakes in competing firms. They maintain that the current “enforcement passivity” on common ownership is unwarranted. Additional antitrust interventions are not justified, though, if they would create greater welfare losses than they would avert. This article considers the decision and error costs that would result from the interventions that have been proposed for remedying the purported problem of common ownership. It concludes that they would be substantial and would likely outweigh any benefits the interventions would secure.

Keywords: common ownership, antitrust, error costs, decision costs

JEL Classification: K2, L4

Suggested Citation

Lambert, Thomas Andrew and Sykuta, Michael E., Are the Remedies for the Common Ownership Problem Worse than the Disease?: Assessing the Likely Decision and Error Costs of Proposed Antitrust Interventions (May 21, 2019). Competition Policy International - CPI Antitrust Chronicle on "Common Ownership Revisited", Spring 2019, Volume 2, Number 2, University of Missouri School of Law Legal Studies Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=3413967

Thomas Andrew Lambert

University of Missouri - School of Law ( email )

Missouri Avenue & Conley Avenue
Columbia, MO MO 65211
United States

Michael E. Sykuta (Contact Author)

University of Missouri at Columbia - Division of Applied Social Sciences ( email )

143 Mumford Hall
Columbia, MO 65211
United States
573-882-1738 (Phone)
573-884-3958 (Fax)

HOME PAGE: http://michaelsykuta.com

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