You are cordially invited to attend the next CEGE4ALL: Markets & Policy Work-in-Progress Seminar by Ricardo Ribeiro, on “Estimating Oligopoly with Shareholder Voting Models”. As this was the base research of a successful PeX FCT application in 2024, Ricardo Ribeiro will also be sharing his personal experience on this topic.
Venue: Católica Porto Business School, Edíficio Américo Amorim, Room EP002
Date: 10 February
Time: 11:30 a.m. - 12:30 p.m.
Format: hybrid (online or in-person)
REGISTRATION
Registration is required. Please register via the link below by 9 March indicating if you will be attending in person or online.
We develop an empirical model of overlapping ownership conduct. The model (i) links firm conduct parameters to deep parameters of the firm's process of shareholder preference aggregation through voting; (ii) can cope with ownership settings involving both intra- and inter-industry overlapping ownership; and (iii) yields an equilibrium flexible formulation for the management’s objective function that allows for no internalization, partial internalization and full internalization of shareholder objectives by managers. Using data for the U.S. airline industry in the 2015-2017 period, we find evidence for a partial internalization formulation in which managers put significant weight on shareholder objectives, but substantially less than in the full-internalization limiting case. We find also that inter-industry overlapping ownership is associated to lower inferred marginal costs, and that omitting inter-industry overlapping ownership leads to substantial bias towards zero in the parameters that drive how much intra-industry overlapping ownership is internalized by the firms. Finally, we find, focusing on the 2017Q4 period, that overlapping ownership overall (both intra- and inter-industry) seems to increase the average airline fare by 4.0%, increase industry profit by 24.4% and decrease consumer surplus by 1.8%, and that these effects are mostly due to overlapping ownership by shareholders other than the “Big Three” asset managers.
Ricardo Ribeiro
Ricardo Ribeiro is an Associate Professor at Católica Porto Business School. He obtained his Ph.D. in Economics at the London School of Economics and Political Science in 2010, and previously held appointment at Universidade do Porto. Ricardo’s research focuses on industrial organization, competition policy, applied microeconomics, and applied econometrics. In his most recent research, he has been examining the impact of overlapping shareholding on market outcomes, from both a theoretical and empirical perspective.
