I keep on seeing papers and notices of the notion that commonly owned firms — say commonly owned by diversified mutual funds — might collude rather than competing vigorously against each other. After all, maximization of joint profit would seem to be the imperative, not firm-by-firm profit.
It is not so widely known who first came up with that idea, and it is my former colleague at UC Irvine, Amihai Glazer. I know this because Ami and I had a co-authored paper on this topic, could it have been as early as the late 1980s? (I don’t remember the year.) And while it was genuinely joint work, the key idea came entirely from Ami, not from me.
We tried to publish the paper at several journals, but they all told us it was crazy.
I should also note Ami and I never quite agreed on what the paper meant. I always viewed it as more of a theoretical curiosity. I’m still not sure I understand Ami’s take, but in general he saw it as closer to a real world possibility or maybe stronger than that. I also thought that even if joint ownership came about, forces akin to those discussed in the socialist calculation debate still would require something akin to firm-by-firm competition, rather than managed collusion (what about just picking managers with sluggish temperaments, thus leading to an intermediate solution?) I don’t think that was Ami’s view back then at least.
I don’t know where my copy of the paper is, I hope Ami still has one. In the meantime, I hope credit goes where credit is due, and that is to Amihai Glazer.