|
Archive@NYU >
Stern School of Business >
Economics Working Papers >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26230
|
| Title: | Wanted: A Market Definition Paradigm for Monopolization Cases |
| Authors: | White, Lawrence J. |
| Issue Date: | 1999 |
| Series/Report no.: | EC-99-01 |
| Abstract: | For the wide range of antitrust cases involving allegations of monopoly
or monopolization (or variations on that theme), the presence of market
power is a necessary prerequisite for finding liability. In turn, the
definition or delineation of a relevant market is essential for
measuring a defendant's market share -- a key determinant of the
presence or absence of market power. Unfortunately, there are few or no
intellectual underpinnings for the market definition process in
monopolization cases. This void contrasts sharply with the substantial
conceptual developments of the past two decades with respect to the
market definition process in antitrust merger analysis, as embodied in
the Merger Guidelines of the U.S. Department of Justice. This article
contrasts the achievements in the merger analysis area with the
continuing dilemmas and conundrums in the monopolization area with
respect to market definition. In the latter area the "cellophane
fallacy" (which is explained), combined with the frequently cloudy
state of firm level profit data, continues to create confusion as to
when the presence of competitors is an indication of the absence of
market power and when their presence is the consequence of the exercise
of market power. Underlying this confusion is the absence of a clear
market definition paradigm for these monopolization cases. Until such a
paradigm is developed, the confusion will persist, as will a pattern of
erratic and inconsistent outcomes in alleged monopolization cases. |
| URI: | http://hdl.handle.net/2451/26230 |
| Appears in Collections: | Economics Working Papers
|
All items in Faculty Digital Archive are protected by copyright, with all rights reserved.
|
