Power indices and the measurement of control in corporate structures

Crama, Yves; Leruth, Luc

doi:10.1142/S0219198913400173

Download

Article (Scientific journals)

Power indices and the measurement of control in corporate structures

Crama, Yves; Leruth, Luc

2013 • In International Game Theory Review, 15, p. 1340017

Peer Reviewed verified by ORBi

Permalink
https://hdl.handle.net/2268/98375

DOI
10.1142/S0219198913400173

Files (1)Send to Details Statistics Bibliography Similar publications

Files

Full Text

SurveyCorporateControl.pdf

Author preprint (198.11 kB)

Download

All documents in ORBi are protected by a user license.

Send to

RIS BibTex APA Chicago Permalink X Linkedin

Details

Keywords :

simple games; voting; power index; corporate governance; ownership structure

Abstract :

[en] This paper proposes a brief review of the use of power indices in the corporate governance literature. Without losing sight of the field of application, it places the emphasis on the game-theoretic aspects of this research and on the issues that arise in this framework.

Research Center/Unit :

QuantOM

Disciplines :

Quantitative methods in economics & management

Author, co-author :

Crama, Yves ; Université de Liège - ULiège > HEC-Ecole de gestion : UER > Recherche opérationnelle et gestion de la production

Leruth, Luc ; Université de Liège - ULiège > HEC-Ecole de gestion : UER > UER Economie

Language :

English

Title :

Power indices and the measurement of control in corporate structures

Publication date :

2013

Journal title :

International Game Theory Review

ISSN :

0219-1989

eISSN :

1793-6675

Publisher :

World Scientific Publishing Company

Volume :

Pages :

1340017

Peer reviewed :

Peer Reviewed verified by ORBi

Available on ORBi :

since 07 September 2011

Statistics

Number of views

233 (17 by ULiège)

Number of downloads

572 (17 by ULiège)

More statistics

Scopus citations^®

Scopus citations^®
without self-citations

OpenCitations

OpenAlex citations

Bibliography

Almeida, H. V. and Wolfenzon, D. [2006] A theory of pyramidal ownership and family business groups, J. Finance 61, 2637-2680.
Amihud, Y. and Barnea, A. [1974] Portfolio selection for managerial control, Omega 2, 775-783.
Aminadav, G., Bachrach, Y., Kosenko, K., Rosenschein, J. S. and Wilf, Y. [2011] Rebuilding the Great Pyramids: A method for identifying control relations in complex ownership structures, Working paper, available at SSRN: http://ssrn.com/abstract=1903941.
Arcaini, G. and Gambarelli, G. [1986] Algorithm for automatic computation of the power variations in share tradings, CALCOLO 23, 13-19.
Aziz, H., Lachish, O., Paterson, M. and Savani, R. [2009] Power indices in spanning connectivity games, in Algorithmic Aspects in Information and Management, AAIM 2009, eds. Goldberg, A. V. & Zhou, Y., Lecture Notes in Computer Science, Vol. 5564 (Springer-Verlag, Berlin Heidelberg), pp. 55-67.
Bachrach, Y., Markakis, E., Resnick, E., Procaccia, A. D., Rosenschein, J. S. and Saberi, A. [2010] Approximating power indices: Theoretical and empirical analysis, Auton. Agents Multi-Agent Syst. 20, 105-122.
Bang-Jensen, J. and Gutin, G. [2000] Digraphs: Theory, Algorithms and Applications (Springer-Verlag, London).
Banzhaf III, J. F. [1965] Weighted voting doesn't work: A mathematical analysis, Rutgers Law Rev. 19, 317-343.
Bebchuk, L. A. and Hart, O. D. [2001] Takeover bids vs. proxy fights in contests for corporate control, ECGI - Finance Working Paper No. 04/2002; Harvard Law and Economics Discussion Paper No. 336, available at SSRN: http://ssrn.com/abstract=290584.
Becht, M., Bolton, P. and Röell, A. [2003] Corporate governance and control, Chapter 1 in Handbook of the Economics of Finance, Vol. 1, Part 1, eds. Constantinides, G. M., Harris, M. & Stulz, R. M., Corporate Finance (Elsevier, Amsterdam), pp. 1-109.
Berle, A. and Means, G. [1932] The Modern Corporation and Private Property (MacMillan, New York).
Bilbao, J. M. [2000] Cooperative Games on Combinatorial Structures (Kluwer Academic Publishers, Dordrecht).
Brams, S. J. [2004] Game Theory and Politics (Dover Publications, Mineola, NY).
Chapelle, A. and Szafarz, A. [2005] Controlling firms through the majority voting rule, Physica A 355, 509-529. (Pubitemid 40940864)
Claessens, S., Djankov, S., Fan, J. P. H. and Lang, L. H. P. [2002] Disentangling the incentive and entrenchment effects of large shareholdings, J. Finance 57, 2741-2771. (Pubitemid 36932099)
Claessens, S., Djankov, S. and Lang, L. H. P. [2000] The separation of ownership and control in East Asian corporations, J. Financ. Econ. 58, 81-112.
Crama, Y. and Hammer, P. L. [2011] Boolean Functions: Theory, Algorithms, and Applications (Cambridge University Press, New York).
Crama, Y. and Leruth, L. [2007] Control and voting power in corporate networks: Concepts and computational aspects, Eur. J. Oper. Res. 178, 879-893. (Pubitemid 44765135)
Crama, Y., Leruth, L., Renneboog, L. and Urbain, J.-P. [2003] Corporate control concentration measurement and firm performance, in Social Responsibility: Corporate Governance Issues, eds., Batten, J. A. & Fetherston, T. A. (Elsevier, Amsterdam), pp. 123-149.
Crama, Y., Leruth, L. and Wang, S. [2011] A Markov chain model of power indices in corporate structures, Working paper (in preparation), University of Liège.
Cubbin, J. and Leech, D. [1983] The effect of shareholding dispersion on the degree of control in British companies: Theory and measurement, Econ. J. 93, 351-369.
Dubey, P., Einy, E. and Haimanko, O. [2005] Compound voting and the Banzhaf index, Games Econ. Behav. 51, 20-30. (Pubitemid 40317448)
Dubey, P. and Shapley, L. S. [1979] Mathematical properties of the Banzhaf power index, Math. Oper. Res. 4, 99-131.
Edelman, P. H. and Thomas, R. S. [2005] Corporate voting and the takeover debate, Vanderbilt Law Rev. 58, 453-498. (Pubitemid 41640492)
Edwards, J. S. S., Eggert, W. and Weichenrieder, A. [2009] Corporate governance and pay for performance: Evidence from Germany, Econ. Govern. 10, 1-26.
Edwards, J. S. S. and Weichenrieder, A. J. [2009] Control rights, pyramids, and the measurement of ownership concentration, J. Econ. Behav. Organ. 72, 489-508.
Ellerman, D. [1991] Cross-ownership of corporations: A new application of input-output theory, Metroeconomica 42, 33-46.
Eurostat [2010] Business Registers: Recommendations Manuel, Eurostat methodologies and Working papers, 2010 edition, Publications Office of the European Union, Luxembourg, available at doi: 10.2785/39851.
Felsenthal, D. S. and Machover, M. [1998] The Measurement of Voting Power: Theory and Practice, Problems and Paradoxes, Cheltenham (Edward Elgar, UK).
Felsenthal, D. S. and Machover, M. [2005] Voting power measurement: A story of reinvention, Soc. Choice Welfare 25, 485-506. (Pubitemid 41809870)
Florence, P. S. [1961] Ownership, Control and Success of Large Companies: An Analysis of English Industrial Structure and Policy, 1936-1951 (Sweet & Maxwell, UK).
Gambarelli, G. [1982] Portfolio selection and firms' control, Finance 3, 69-83.
Gambarelli, G. [1983] Common behaviour of power indices, Int. J. Game Theor. 12, 237-244.
Gambarelli, G. [1994] Power indices for political and financial decision making, Ann. Oper. Res. 51, 165-173.
Gambarelli, G. [1996] Takeover algorithms, in Modelling Techniques for Financial Markets and Bank Management, eds. Bertocchi, M. et al. (Physica Verlag, Heidelberg), pp. 212-222.
Gambarelli, G. and Owen, G. [1994] Indirect control of corporations, Int. J. Game Theor. 23, 287-302.
Gambarelli, G. and Pesce, S. [2004] Takeover prices and portfolio theory, Theor. Decis. 36, 193-203.
Gorton, G. and Schmid, F. A. [2000] Universal banking and the performance of German firms, J. Financ. Econ. 58, 29-80.
Grabisch, M. and Rusinowska, A. [2010] Different approaches to influence based on social networks and simple games, in Collective Decision Making, eds. van Deemen, A. & Rusinowska, A. (Springer-Verlag, Berlin, Heidelberg), pp. 185-209.
Hu, X. and Shapley, L. S. [2003] On authority distributions in organizations: Equilibrium, Games Econ. Behav. 45, 132-152. (Pubitemid 37194962)
Karp, R. M., Luby, M. and Madras, N. [1989] Monte-Carlo approximation algorithms for enumeration problems, J. Algorithms 10, 429-448.
Khatri, Y., Leruth, L. and Piesse, J. [2002] Corporate performance and governance in Malaysia, Working paper 152, International Monetary Fund, Washington DC.
Klinz, B. and Woeginger, G. J. [2005] Faster algorithms for computing power indices in weighted voting games, Math. Soc. Sci. 49, 111-116. (Pubitemid 40019388)
La Porta, R., Lopez-De-Silanes, F. and Shleifer, A. [1999] Corporate ownership around the world, J. Finance 54, 471-517.
Leech, D. [1987a] Corporate ownership and control: A new look at the evidence of Berle and Means, Oxford Econ. Papers 39, 534-551.
Leech, D. [1987b] Ownership concentration and the theory of the firm: A simple-gametheoretic approach, J. Ind. Econ. 35, 225-240.
Leech, D. [1988] The relationship between shareholding concentration and shareholder voting power in British companies: A study of the application of power indices for simple games, Manag. Sci. 34, 509-527.
Leech, D. [2002] An empirical comparison of the performance of classical power indices, Polit. Studies 50, 1-22.
Leech, D. [2003] Computing power indices for large voting games, Manag. Sci. 49, 831-838.
Leech, D. and Leahy, J. [1991] Ownership structure, control type classification and the performance of large British companies, Econ. J. 101, 1418-1437.
Leech, D. and Manjòn, M. C. [2003] Corporate governance and game theoretic analyses of shareholder power: The case of Spain, Appl. Econ. 35, 847-858. (Pubitemid 36650417)
Levy, M. [2009] Control in pyramidal structures, Corp. Govern.: Int. Rev. 17, 77-89.
Levy, M. [2011] The Banzhaf index in complete and incomplete shareholding structures: A new algorithm, Eur. J. Oper. Res. 215, 411-421.
Mann, I. and Shapley, L. S. [1960] Values of large games IV: Evaluating the Electoral College by Monte Carlo techniques, Memo RM-2651, The Rand Corporation, Santa Monica, CA.
Matsui, T. and Matsui, Y. [2000] A survey of algorithms for calculating power indices of weighted majority games, J. Oper. Res. Soc. Jpn. 43, 71-86.
Megiddo, N. [1974] Nucleolus of compound simple games, SIAM J. App. Math. 26, 607-621.
Milnor, J. W. and Shapley, L. S. [1978] Values of large games II: Oceanic games, Math. Oper. Res. 3, 1-9.
Montero, M. [2005] On the nucleolus as a power index, Homo Oeconomicus 4, 551-567.
Nenova, T. [2003] The value of corporate voting rights and control: A cross-country analysis, J. Financ. Econ. 68, 325-351. (Pubitemid 36613831)
Nicodano, G. and Sembenelli, A. [2004] Private benefits, block transaction premiums and ownership structure, Int. Rev. Financ. Anal. 13, 227-244. (Pubitemid 38597380)
Owen, G. [1972] Multilinear extensions of games, Manag. Sci. 18, 64-79.
Owen, G. [1975] Multilinear extensions and the Banzhaf value, Nav. Res. Logist. Q. 22, 741-750.
Owen, G. [1978] Characterization of the Banzhaf-Coleman index, SIAM J. App. Math. 35, 315-327.
Owen, G. [1995] Game Theory (Academic Press, San Diego).
Penrose, L. S. [1946] The elementary statistics of majority voting, J. R. Stat. Soc. 109, 53-57.
Pohjola, M. (1988). Concentration of shareholder voting power in Finnish industrial companies, Scand. J. Econ. 90, 245-253.
Rydqvist, K. [1987] The Pricing of Shares with Different Voting Power and the Theory of Oceanic Games, Doctoral Dissertation, Stockholm School of Economics.
Shapiro, N. Z. and Shapley, L. S. [1978] Values of large games I: A limit theorem, Math. Oper. Res. 3, 290-307.
Shapley, L. S. [1962] Simple games: An outline of the descriptive theory, Behav. Sci. 7, 59-66.
Shapley, L. S. and Shubik, M. [1954] A method for evaluating the distribution of power in a committee system, Am. Polit. Sci. Rev. 48, 787-792.
Shleifer, A. and Vishny, R. W. [1997] A survey of corporate governance, J. Finance. 52, 737-783. (Pubitemid 127344405)
Wang, S. [2009] Control and power in corporate and bank networks, Internship report, Ecole Polytechnique and International Monetary Fund, Paris.
Zingales, L. [1994] The value of the voting right - A study of the Milan Stock Exchange experience, Rev. Financ. Studies 7, 125-148.
Zwiebel, J. [1995] Block investment and partial benefits of corporate control, Rev. Econ. Studies 62, 161-185.