In industries like fishing or logging, it’s actually better for the planet if competing companies own a piece of each other.
March 26, 2026
Original Paper
On the impact of cross-ownership in a common property renewable resource oligopoly
SSRN · 6468281
The Takeaway
Standard antitrust logic suggests that 'cross-ownership' kills competition and hurts consumers. However, this study finds that when companies share a common natural resource, owning each other's stock makes them more careful about over-exploiting it, which can actually lead to higher long-term output and better social welfare.
From the abstract
We construct a Markov Perfect Nash Equilibrium of a dynamic Cournot oligopoly where firms jointly exploit a productive asset (renewable resource) and engage in rival cross-shareholdings. We show that there exists an interval of stocks where cross-ownership can (i) increase market output, (ii) be profitable, and (iii) increase social welfare, both in the short run and at the steady state. These effects are in stark contrast with those obtained in a static oligopoly framework with strategic substi