Market Definition with Shock Analysis
Norwegian School of Economics (NHH)
Norwegian School of Economics and Business Administration (NHH); Norwegian School of Economics (NHH) - Department of Economics
KU Leuven - Center for Economic Studies
December 4, 2007
NHH Dept. of Economics Discussion Paper No. 36/2007
The SSNIP test for market definition requires information about demand substitution and profitability. If detailed information about demand is not available, observed effects of a shock in the industry may be an alternative source of evidence. In the existing literature, shock analysis has unfortunately not been clearly linked to the SSNIP test. The lack of a rigorous framework may confuse the interpretation of the effects of shocks. We illustrate how a shock can be evaluated within the SSNIP framework with a minimum of data. We apply our criterion to a capacity expansion in the ferry market in the North Sea.
Number of Pages in PDF File: 22
Date posted: February 11, 2010
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