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Price-Based Techniques for Market Definition & Buying Power Index

Panagiotis N. Fotis

University of Central Greece - Department of Regional Economic Development; Hellenic Competition Commission

July 15, 2012

This paper focuses on a recent merger in Greek diary sector and empirically investigates the delineation of the market of production and distribution of white milk in Greece, the role of product asymmetries in market delineation along with evidences of unilateral effects of the merger and the existence of buying power of merged entity in the relevant product market for the procurement of raw milk. The empirical results indicate that the markets of production and distribution of fresh, High Pasteurization & Condensed milk in Greece are highly inelastic and constitute distinct relevant product markets. Large product asymmetries lead to broader relevant product markets, while evidences of unilateral effects are present for specific pairs of white milk products. Lastly, the merged entity may exercise its buying power after the clearness of the merger, even thought in the case where the market elasticity of supply and the own price elasticity of demand of the competitive fringe are highly inelastic.

Number of Pages in PDF File: 39

Keywords: Market Definition, Conditional Elasticities, SSNIP test, Critical Loss Analysis, Diversion Ratio, Unit Root tests, Cointegration Analysis, Upward Pricing Pressure, Buying Power Index

JEL Classification: C01, C13, C15, C21, K00, L16

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Date posted: July 29, 2012  

Suggested Citation

Fotis, Panagiotis N., Price-Based Techniques for Market Definition & Buying Power Index (July 15, 2012). Available at SSRN: https://ssrn.com/abstract=2118502 or http://dx.doi.org/10.2139/ssrn.2118502

Contact Information

Panagiotis N. Fotis (Contact Author)
University of Central Greece - Department of Regional Economic Development ( email )
Lambrou Katsoni Square
Livadia, GR-321 00
HOME PAGE: http://poa.ucg.gr/
Hellenic Competition Commission ( email )
Kotsika 1A Street & Patision
ATHENS, 10434
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