[pkilgore]

I agree the title should be 'is common ownership evil'... because as is clear from the article itself, large individual shareholders like Berkshire Hathaway will still have these hypothetical incentives. Picking on index funds merely criticizes regular folks' only access to the power of diversification not diversification generally.

That said, I think diverse common ownership is probably less risky than concentrated common ownership due to collective action problems in the former that don't exist in the latter. E.g., if 10k people commonly own 25% of each airline, it's a lot harder for them to push for collision than if a single fund owns 25% of each airline.

Regardless, very interesting article.