Pricing Benchmark in Market Definition: Theoretical Background and Practical Application

Siniša Milošević (), Jelena Popović Markopoulos (), Jelena Grahovac () and Aleksandra Ravić ()
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Siniša Milošević: Serbian Commission for Protection of Competition
Jelena Popović Markopoulos: Serbian Commission for Protection of Competition
Jelena Grahovac: Serbian Commission for Protection of Competition
Aleksandra Ravić: Serbian Commission for Protection of Competition

A chapter in Competition Authorities in South Eastern Europe, 2018, pp 173-188 from Springer

Abstract: Abstract The definition of the relevant market is one of the most basic underlying concepts of all substantive issues in competition law related to the concentration of enterprises, restrictive agreements and abuse of dominant position. Different methodologies are used for determining the relevant market. What will be applied specifically depends on several factors, the most important including the very nature of a specific product market and data availability. This paper presents the application of methods that are based on the price movement of the products under consideration: correlation, stationarity test (unit root test), cointegration test, and Granger causality test. The aim of the paper is to verify the reliability of these tests in the process of specifying the relevant market. We will demonstrate the practical application of price-based tests on the analysis of monthly time-series data related to the price of three products during the 4-year period.

Keywords: Competition; Relevant market; Demand substitution; Price tests; Correlation; Co-integration (search for similar items in EconPapers)
JEL-codes: C32 D47 K21 L66 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/978-3-319-76644-7_10

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