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Anticompetitive Effects of Common Ownership

Study of common ownership and ticket prices on US airline routes by José Azar, Martin C. Schmalz and Isabel Tecu, published in The Journal of Finance in 2018.

6 links, 1 backed by primary records

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Dates
2018
Also known as
Anti-Competitive Effects of Common Ownership, AST paper
Over time
  1. Span 2018
  2. author Isabel Tecu 2014–2018
  3. author José Azar 2014–2018
  4. author Martin C. Schmalz 2014–2018
The debate

What it found

we find that airline ticket prices are 3% to 7% higher due to common ownership, compared to a counterfactual world in which firms are separately owned or in which firms ignore the anticompetitive incentives of their owners due to common ownership1

Who disputes it

  • BlackRock 15 Jan 2019

    When the aforementioned erroneous assumptions are corrected, Analysis Group finds no statistically significant relationship between ‘common ownership’ and airline ticket prices.2

    The letter calls the study the “AST Paper”. Analysis Group is a consultant BlackRock hired.
  • Common Ownership Does Not Have Anticompetitive Effects in the Airline Industry Sep 2022

    We further show that the results are sensitive to measures of investor control and to assumptions about equity holders' ownership and control during bankruptcy.34

    The abstract says “prior research”. Isabel Tecu, a co-author of the 2018 study, names this paper among those answering it.

Each side is quoted in its own words. Whether a finding holds is not decided here.

Connections 6

finding disputed by

features

author

Timeline 6 dates
  1. 2014–2018 Isabel Tecu authored Anticompetitive Effects of Common Ownership
  2. 2014–2018 José Azar authored Anticompetitive Effects of Common Ownership
  3. 2014–2018 Martin C. Schmalz authored Anticompetitive Effects of Common Ownership
  4. 2018 Anticompetitive Effects of Common Ownership
  5. 15 Jan 2019 BlackRock disputes a finding of Anticompetitive Effects of Common Ownership According to BlackRock
  6. Sep 2022 Common Ownership Does Not Have Anticompetitive Effects in the Airline Industry disputes a finding of Anticompetitive Effects of Common Ownership According to Common Ownership Does Not Have Anticompetitive Effects in the Airline Industry
Proof 4 sources
  1. Anticompetitive Effects of Common Ownership (The Journal of Finance, vol. 73, no. 4, 2018), Wiley, for the American Finance Association, 25 May 2018. Scholarship & press Archived copy
    we find that airline ticket prices are 3% to 7% higher due to common ownership, compared to a counterfactual world in which firms are separately owned or in which firms ignore the anticompetitive incentives of their owners due to common ownership
    In the U.S. airline industry, taking common ownership into account implies increases in market concentration that are 10 times larger than what is “presumed likely to enhance market power” by antitrust authorities.
    Anticompetitive Effects of Common Ownership JOSÉ AZAR Search for more papers by this author MARTIN C. SCHMALZ Search for more papers by this author ISABEL TECU
  2. Comment letter to the Federal Trade Commission on Hearing #8 (Common Ownership), Competition and Consumer Protection in the 21st Century, BlackRock, 15 Jan 2019. Primary record
    When the aforementioned erroneous assumptions are corrected, Analysis Group finds no statistically significant relationship between ‘common ownership’ and airline ticket prices.
    This testing was performed by a third party consultant, Analysis Group, hired by BlackRock.
  3. Common Ownership Does Not Have Anticompetitive Effects in the Airline Industry (The Journal of Finance, vol. 77, no. 5, 2022), Wiley, for the American Finance Association, 1 Sep 2022. Scholarship & press
    We further show that the results are sensitive to measures of investor control and to assumptions about equity holders' ownership and control during bankruptcy.
  4. “Anticompetitive Effects of Common Ownership” at Seven Years (Antitrust, vol. 36, no. 1, Fall 2021), American Bar Association, 2021. Scholarship & press
    Dennis, Gerardi, and Schenone subsequently offered a similar conclusion in a paper provocatively titled “Common Ownership Does Not Have Anti-Competitive Effects in the Airline Industry” (DGS).
    2014, JOSÉ AZAR, MARTIN SCHMALZ, AND I posted a working paper titled “Anti-Competitive Effects of Common Ownership” (AST).
Page history 2 changes
  1. Sprint 12: State Street, disputing a finding, holders by filing dateAlibek5075dda
  2. connect-the-dot: sourced knowledge graph engine, site and contentAlibeka7fa236

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