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Making sense of market delineation with the aggregate diversion ratio

Daljord, Øystein Børnes; Sørgard, Lars; Thomassen, Øyvind
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dp2007-18.pdf (359.2Kb)
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http://hdl.handle.net/11250/163028
Utgivelsesdato
2007-08
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  • Discussion papers (SAM) [676]
Sammendrag
The US Merger Guidelines leave it an open question if the SSNIP test

requires an increase in one, some or all prices in the candidate market. We

argue that the characteristics of the candidate market in question should

be decisive for how to perform the SSNIP test. If there are asymmetries

between products, increasing one price might be a better procedure in

order to identify competitive constraints. Katz & Shapiro (2003) derived

a one-price criterion in terms of the aggregate diversion ratio which is applicable for asymmetric candidate markets. Unfortunately, the derivation

is incorrect. We derive a corrected criterion.
Utgiver
Norwegian School of Economics and Business Administration. Department of Economics
Serie
Discussion paper
2007:18

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