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Identifying Anti-Trust Markets


Identifying Anti-Trust Markets " The identification of markets is a standard feature of anti-trust investigations, and the substantive decision in many cases stands or falls on the precise market definition selected. Market shares are often used to help establish jurisdiction or, more generally, to sort out priorities for anti-trust agencies. Market shares are also sometimes used as an observable measure of market power, meaning that the fact of finding high market shares is sometimes taken to be tantamount to uncovering the existence of market power. The standard test used by most anti-trust authorities to define markets is the so-called SSNIP test (sometimes also called "the hypothetical monopolist test"), which is designed to explore the consequences of a (hypothetical) Small but Significant Non-transitory Increase in Price on the profitability of the (hypothetical) firm that initiates it. By P.A. Geroski and R. Griffith of the Institute for Fiscal Studies.


By Institute for Fiscal Studies , UK.

Macro Economic Policy Resource.