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Framework for Valid Market Definition Tests in Merger Control

WPnull/10 Framework for Valid Market Definition Tests in Merger Control
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  • Javier Elizalde (
    Facultad de Ciencias Económicas y Empresariales, Universidad de Navarra

This work develops a formal framework for market definition. The conditions a test must satisfy are selected in order to define the relevant market according to the jurisdictions of the United States and the European Community. I use two models of horizontal product differentiation to illustrate the two approaches of the hypothetical monopolist test: the price-increase approach and the profit-maximisation approach. The nature of the tests that can be used under the two jurisdictions differ significantly as do the tests valid under the successive revisions of the 1982 Horizontal Merger Guidelines in the United States. When supply-side substitution is feasible, markets defined under the European Community approach are wider than those defined under the United States approach.

Classification JEL:D43, K21, L11, L13, L41

Keywords:Antitrust Analysis, Horizontal Product Differentiation, Market definition, Oligopolistic Competition

Number of Pages:41

Creation Date:2010-02-09




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