Implementing Relevant Market Tests in Antitrust Policy: Application to Computer Servers

Ivaldi, Marc; Lörincz, Szabolcs

doi:10.2139/ssrn.652744

Cited by 11 publications

(15 citation statements)

References 12 publications

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“…This structural model allows for the exact implementation of the thought experiment prescribed by the merger guidelines' SSNIP test. The use of such models has been promoted in the past decade as a theoretically superior approach to merger analysis in differentiated product industries, (e.g., Nevo []; Motta []; Baker []; Geroski and Griffith []; Van Reenen []; Ivaldi and Lőrincz []) however, such an approach has not been commonly employed in antitrust analysis, and thus little is known about the differences in markets produced by these methods relative to the methods used in actual merger cases…”

Section: Introductionmentioning

confidence: 99%

A Structural Approach to Market Definition With an Application to the Hospital Industry

Gaynor

Kleiner

Vogt

2013

The J Industrial Economics

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Market definition is common in merger analysis, and often the decisive factor in antitrust cases. This has been particularly relevant in the hospital industry, where many merger challenges have been denied due to disagreements over geographic market definition. We compare geographic markets produced using frequently employed ad hoc methodologies to structural methods that directly apply the ‘SSNIP test’ to California hospitals. Our results suggest that markets produced using previous methods overstate hospital demand elasticities by a factor of 2.4 to 3.4 and were likely a contributing factor to the permissive legal environment for hospital mergers.

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Section: Introductionmentioning

confidence: 99%

A Structural Approach to Market Definition With an Application to the Hospital Industry

Gaynor

Kleiner

Vogt

2013

The J Industrial Economics

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“…In literature, the number of studies which utilize both demand estimation and simulation techniques to delineate the relevant market is rather limited: The most important study in this area is Ivaldi and Lörincz (2011) which proposed the name of the Full Equilibrium Relevant Market (FERM) Test. 10 Ivaldi and Lörincz (2011) applied SSNIP and FERM tests to the industry of computer servers.…”

Section: Literature Reviewmentioning

confidence: 99%

“…In practice, relevant market definitions are not implemented formally, they are used only as a framework of thinking about the problem. The proper application of tests might result in more fragmentation in the market structure found (Ivaldi and Lörincz 2011). To be more precise, it should be expected that under FERM there is a tendency to get narrower markets than under SSNIP.…”

Section: Literature Reviewmentioning

confidence: 99%

Untitled

2018

GJEB

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Gazi İktisat ve İşletme Dergisi, 2018; 4(2): 67-86 www.dergipark.gov.tr/gjebIn this paper, we investigate the degree of competition between alternative ro-ro lines operating between Turkey and Europe (intramodal competition). We also aim to analyze whether the land (road) transport is a significant substitute for the ro-ro transport for the trade between Turkey and Europe (intermodal competition). This paper is a part of the economic analysis which we carried out for defining the relevant market in a case in which the Turkish Competition Authority (TCA) investigated the predatory pricing behavior of UN Ro-Ro İşletmeleri A.Ş. (UN Ro-Ro) in 2012. The analysis consists of two stages: We first estimate price elasticities of demand for ro-ro lines by using a logit demand model with firm-level data. Then, 'full equilibrium relevant market' (FERM) test which is a more developed version of the hypothetical monopolist test (HMT) is used in order to run several hypothetical merger simulations for measuring intramodal and intermodal competition. The results show that the relevant market incorporates only seven ro-ro lines, not land transport.

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“…The complete hybrid shows a price fall of 30% per annum for work group servers compared to 20% per annum for high-end enterprise servers. 18 This is suggestive (although hardly conclusive) of different market segments for low-end and highend servers; see e.g., Ivaldi and Lorinz (2004) or Van Reenen (2004) for more on market definition.…”

Section: F40mentioning

confidence: 99%

The Growth of Network Computing: Quality‐Adjusted Price Changes for Network Servers

Reenen

2006

The Economic Journal

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This article investigates the evolution of quality-adjusted prices for servers motivated by two facts. First, the recent productivity acceleration in the US is closely linked to the spread of IT of which networked computing is a large component. Second, the growth of network computing itself has been fostered by the rapid growth in the quality and quantity of server hardware and software. The preferred hedonic price index fell much more rapidly than the standard Ômatched modelÕ price index, mainly due to the selection bias in the standard model arising from the exit of obsolete models, which would have had the fastest price falls.

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Implementing Relevant Market Tests in Antitrust Policy: Application to Computer Servers

Cited by 11 publications

References 12 publications

A Structural Approach to Market Definition With an Application to the Hospital Industry

A Structural Approach to Market Definition With an Application to the Hospital Industry

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The Growth of Network Computing: Quality‐Adjusted Price Changes for Network Servers

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