Common ownership reduces market entries, impacting welfare in surprising ways.
The article explores how having common ownership affects new businesses entering a market. The researchers created a model where companies owned by the same entity decide whether to enter a new market. They found that when common ownership increases, fewer new businesses enter the market. This can either help or hurt overall welfare. The relationship between welfare and common ownership is like a U-shape, meaning there is an optimal level of common ownership that is beneficial.