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American Law and Economics Review V6 N2 2004 (465-475)
American Law and Economics Review Vol. 6 No. 2, © American Law and Economics Association 2004; all rights reserved.

Discussion of "Using Stationarity Tests in Antitrust Market Definition"

Daniel Hosken and Christopher T. Taylor

Federal Trade Commission

Send correspondence to: Daniel Hosken, Federal Trade Commission, 600 Pennsylvania Ave. NW, Washington, DC 20850; E-mail: dhosken@ftc.gov.

The first 150 words of the full text of this article appear below.


   1. Introduction
 
The purpose of market definition in a merger or nonmerger antitrust analysis is to identify products that are important substitutes to those produced by the firms being investigated. The market definition exercise includes determining both the product market, that is, which products are important substitutes, and the geographic market, that is, which firms are physically close enough to provide viable substitutes. The 1992 United States Department of Justice and Federal Trade Commission Horizontal Merger Guidelines define a product (geographic) market as the smallest set of products (area) such that a hypothetical monopolist of these products could increase price a small but significant amount, typically 5% to 10%. The Guidelines approach to market definition is somewhat artificial since a product (area) is said to be either "in" or "out" of the market. Because most products are differentiated, there is rarely a clear demarcation between products that are important substitutes and those . . . [Full Text of this Article]


   2. Limitations of Price Studies for Market Definition
 

   3. Difficulty of Implementation
 

   4. Conclusion
 

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