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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26179
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| Title: | Market Definition and the Identification of Market Power in
Monopolization Cases: A Critique and a Proposal |
| Authors: | White, Lawrence
Nelson, Philip B. |
| Keywords: | antitrust
monopolization
exclusionary practices
market definition |
| Issue Date: | 17-Nov-2003 |
| Series/Report no.: | EC-03-26 |
| Abstract: | Although there is agreement on the basic economic principles that should
apply to monopolization cases, there is no widely accepted paradigm for
market definition or the identification of market power in such cases.
This contrasts with the SSNIP paradigm of the DOJ-FTC Horizontal Merger
Guidelines, which has gained wide acceptance in the two decades since
its introduction. Moreover, misguided notions of market definition in
monopolization cases still fall into a repeat commission of the
“cellophane fallacy” of U.S. v. du Pont (1956). To correct
this problem, we propose asking the following question in monopolization
cases where exclusionary practices are alleged: Would preservation of
the allegedly foreclosed competitor or group of competitors have led to
a small but significant nontransitory decrease in price (SSNDP) by the
defendant? This SSNDP test can help define the relevant market and, more
importantly, can allow courts to focus directly on the anticompetitive
effects of the defendant’s actions and thereby on the exercise of
market power. |
| URI: | http://hdl.handle.net/2451/26179 |
| Appears in Collections: | Economics Working Papers
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