Market Definition and the Merger Guidelines

Article

Abstract

The recently issued revision of the US Horizontal Merger Guidelines, like its predecessors and mirrored by similar guidelines throughout the world, devotes substantial attention to the market definition process and the implications of market shares in the market that is selected. Nevertheless, some controversy concerning the revised Guidelines questions their increased openness toward more direct, economically based methods of predicting the competitive effects of mergers. By contrast, this article suggests that, as a matter of economic logic, the Guidelines revision can only be criticized for its timidity. Indeed, economic principles unambiguously favor elimination of the market definition process altogether.

Keywords

Market definition Mergers Merger guidelines Hypothetical monopolist test Competition policy Antitrust 

JEL Classification

D42 K21 L40 

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Copyright information

© Springer Science+Business Media, LLC. 2011

Authors and Affiliations

  1. 1.Harvard University and the National Bureau of Economic ResearchCambridgeUSA

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