Abstract

http://ssrn.com/abstract=1608428
 
 

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Recapture, Pass-Through, and Market Definition


Joseph Farrell


University of California, Berkeley - Department of Economics

Carl Shapiro


University of California, Berkeley - Haas School of Business


Antitrust Law Journal, Vol. 76, No. 3, pp. 585-604, 2010

Abstract:     
We describe how the hypothetical monopolist test used to define relevant markets in horizontal merger cases can be implemented using the fundamental economic concepts of opportunity cost and pass-through. Unlike critical loss analysis, our approach analyzes the behavior of a profit-maximizing hypothetical monopolist, as called for in the 1992 Horizontal Merger Guidelines. This approach also can provide a consistency check between relevant markets defined using the hypothetical monopolist test and claims regarding the pass-through of merger-specific efficiencies.

Number of Pages in PDF File: 20

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Date posted: May 16, 2010  

Suggested Citation

Farrell, Joseph and Shapiro, Carl, Recapture, Pass-Through, and Market Definition. Antitrust Law Journal, Vol. 76, No. 3, pp. 585-604, 2010. Available at SSRN: http://ssrn.com/abstract=1608428

Contact Information

Joseph Farrell
University of California, Berkeley - Department of Economics ( email )
549 Evans Hall #3880
Berkeley, CA 94720-3880
United States
510-642-9854 (Phone)
510-642-6615 (Fax)
Carl Shapiro (Contact Author)
University of California, Berkeley - Haas School of Business ( email )
545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States
510-642-5905 (Phone)
HOME PAGE: http://faculty.haas.berkeley.edu
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