In this chapter, the authors explain the “hypothetical monopolist test,” the standard methodology for identifying relevant antitrust markets in merger cases, and discuss two approaches to implementing the test. They focus on the implementation of the test when firms offer multiple products or services, either inside or outside the candidate market, and discuss the “hypothetical cartel test” introduced in the 2010 US Merger Guidelines.
This chapter appears in Antitrust Economics for Lawyers. For more information, click here.
Assessing umbrella pricing incentives
When collusive agreements involve a subset of firms in an industry, they may create the incentive and ability for firms that are not participants in the cartel...