A Full Equilibrium Relevant Market Test: Application to Computer Servers

Marc Ivaldi and Lörincz, Szabolcs

No 4917, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The paper defines, implements and compares two empirical tests of relevant markets. While the traditional SSNIP test compares an initial industry equilibrium to an out-of-equilibrium situation, the FERM test, our contribution, compares the same initial equilibrium to an other equilibrium outcome. Hence, it is more in line with the behavioural assumptions of the underlying model of industry equilibrium and this can have significant consequences. We define these concepts formally and apply them to the industry of computer servers by estimating a model on a large dataset. We find several smaller relevant markets in the low-end segment of servers.

Keywords: Relevant market tests; Differentiated products; Computer servers (search for similar items in EconPapers)
JEL-codes: C33 L41 L63 (search for similar items in EconPapers)
Date: 2005-02
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Citations: View citations in EconPapers (6)

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Working Paper: A Full Equilibrium Relevant Market Test: Application to Computer Servers (2005)
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