Why Markets Matter for Evidence-Based Merger Analysis

Abstract

While the Merger Guidelines structure represents the standard approach to merger analysis in the US, economists have proposed methods to dispense with market definition and estimate the competitive effect directly. In this note, we argue that market definition is necessary to evaluate the assumptions of any merger analysis and thus, cannot be dispensed with. Moreover, we suggest that market definition plays an important role in the stakeholders’ merger guidance process, the regulator’s merger screening process, and the court’s merger decision process.

Keywords: antitrust, market definition, mergers,

JEL Classification: K21, L40