Market Definition Alchemy

28 Pages Posted: 16 May 2013

See all articles by Louis Kaplow

Louis Kaplow

Harvard Law School; National Bureau of Economic Research (NBER)

Date Written: May 15, 2013


In a recent series of articles, I argue that the market definition/market share paradigm should be abandoned entirely. Among my central claims are that: (1) as a matter of economic logic, there exists no valid way to infer market power from the market shares in redefined (non-homogeneous-goods) markets — short of entirely reversing the market redefinition; and (2) choosing a best market requires already having in hand one’s best estimate of market power, rendering the exercise pointless — actually worse, since the market power inference from the chosen market is inferior to the estimate with which one began. Not surprisingly, criticisms advanced in this Symposium and elsewhere do not succeed in repealing the laws of logic, any more than medieval alchemists were able to overturn the laws of nature.

Keywords: Market definition, Mergers, Merger guidelines, Hypothetical monopolist test, Competition policy, Antitrust

JEL Classification: D42, K21, L40

Suggested Citation

Kaplow, Louis, Market Definition Alchemy (May 15, 2013). Antitrust Bulliten, Vol. 57, 2012. Available at SSRN: or

Louis Kaplow (Contact Author)

Harvard Law School ( email )

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Cambridge, MA 02138
United States
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617-496-4880 (Fax)


National Bureau of Economic Research (NBER)

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