the corporate governance issue (a more speculative case) doesn’t depend on the skill or attention of the supervisor, but their incentives. 1/

a very skilled and attentive diversified investor might prefer collusion, or even let some firms fail because the enhancement of market power in the remaining firms would more than make up the loss. 2/

shareholder skill and attention under these circumstances is a negative. shareholder skill and attention is socially valuable when shareholders are undiversified, and so want their horses to compete better than the other guy’s. /fin