22 Pages Posted: 11 Feb 2010
Date Written: December 4, 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.
Suggested Citation: Suggested Citation
Daljord, Øystein and Sorgard, Lars and Thomassen, Øyvind, Market Definition with Shock Analysis (December 4, 2007). NHH Dept. of Economics Discussion Paper No. 36/2007. Available at SSRN: https://ssrn.com/abstract=1550742 or http://dx.doi.org/10.2139/ssrn.1550742