Abstract

http://ssrn.com/abstract=1599270
 
 

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Lightening Up Market Definition


David S. Evans


University of Chicago Law School; University College London; Global Economics Group

May 1, 2010

RESEARCH HANDBOOK ON THE ECONOMICS OF ANTITRUST LAW, Einer Elhauge, ed., New York: Edward Elgar, 2010

Abstract:     
This article proposes a resolution to the longstanding controversy between courts, economists, and antitrust authorities over the appropriate role of market delineation. Market definition should remain the first step in antitrust and merger analysis. It provides information on competitive constraints and other aspects of the economic landscape that are essential for understanding whether the practice at issue could harm consumers. However, there is no basis in economics for, as a general matter, drawing hard market boundaries and making strong inferences about market power from shares calculated based on those boundaries. The courts should abandon these practices, which are not required by the antitrust statutes, as they have done with other antitrust jurisprudence, such as maximum price fixing, that has been shown to be inconsistent with economics. They can write coherent analyses of antitrust issues without relying on hard market boundaries. The antitrust authorities should examine the competitive effects of business practices such as mergers only after a market inquiry that focuses on understanding the competitive landscape and the potential competitive constraints on business practices; but that inquiry does not need to settle on a hard boundary.

Number of Pages in PDF File: 37

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Date posted: May 4, 2010  

Suggested Citation

Evans, David S., Lightening Up Market Definition (May 1, 2010). RESEARCH HANDBOOK ON THE ECONOMICS OF ANTITRUST LAW, Einer Elhauge, ed., New York: Edward Elgar, 2010. Available at SSRN: http://ssrn.com/abstract=1599270

Contact Information

David S. Evans (Contact Author)
University of Chicago Law School ( email )
1111 E. 60th St.
Chicago, IL 60637
United States
University College London ( email )
London WC1E OEG
United Kingdom
Global Economics Group ( email )
1400 S. Dearborn, Suite 400
Chicago, IL 60603
United States
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