Sequential versus simultaneous market

Niels Haldrup (), Peter Møllgaard and Claus Kastberg Nielsen
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Claus Kastberg Nielsen: Department of Economics, Copenhagen Business School, Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark

No 02-2005, Working Papers from Copenhagen Business School, Department of Economics

Abstract: Delineation of the relevant market forms a pivotal part of most antitrust cases. The standard approach is sequential. First the product market is delineated, then the geographical market is defined. Demand and supply substitution in both the product dimension and the geographical dimension will normally be stronger than substitution in either dimension. By ignoring this one might decide first to define products narrowly and then to define the geographical extent narrowly ignoring the possibility of a diagonal substitution. These reflections are important in the empirical delineation of product and geographical markets. Using a unique data set for prices of Norwegian and Scottish salmon, we propose a methodology for simultaneous market delineation and we demonstrate that compared to a sequential approach conclusions will be reversed.

Keywords: Relevant market; econometric delineation; salmon (search for similar items in EconPapers)
JEL-codes: C30 K21 L41 Q22 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2005-03-15
New Economics Papers: this item is included in nep-com, nep-ind, nep-law and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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