We examine the effects of overlapping ownership in a Cournot oligopoly where
existing firms with overlapping ownership decide whether to enter a new market. We
show that entry is either monotonically decreasing in the degree of overlapping ownership
or has an inverted-U relationship with it. Although entry is excessive under
non-decreasing returns to scale, with decreasing returns to scale entry (in contrast
to standard results) is insufficient under high levels of overlapping ownership. Under
standard assumptions, we find that overlapping ownership magnifies the negative impact
of an increase of entry costs on entry providing a rationale for empirical evidence.
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