Market Concentration in the Antitrust Analysis of Horizontal Mergers

Abstract

This handbook chapter appears in Antitrust Law & Economics (Keith Hylton, ed. 2010). It describes the role of market concentration in the legal framework for the antitrust review of horizontal mergers and evaluates the extent to which modern economic analysis supports a role for concentration in that review. The chapter examines market definition, the predicate for measuring market shares and market concentration, and the role of market shares and concentration in the analysis of the coordinated and unilateral competitive effects of merger. The central issue considered is when and how market shares, and market concentration statistics derived from them, form an appropriate basis for presuming harm to competition from merger. This revision corrects an error in the published chapter.

Keywords: antitrust, mergers, concentration

JEL Classification: K22, L4