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The Relevant Temporal Market Definition In Antitrust Analysis

Author

Listed:
  • Anzhelika Gerasymenko

    (Department of Economics and Competition Policy, Kyiv National University of Trade and Economics, Ukraine)

  • Svitlana Afendikova

    (Department of Economics and Competition Policy, Kyiv National University of Trade and Economics, Ukraine)

Abstract

The purpose of the paper is to compare various theoretical approaches to the relevant temporal market definition, collecting the arguments for their implementation under the different kinds of antitrust cases. It is vital for the markets with peak demand (transport, electricity, markets of intergenerational products) or discreet supply (agriculture). Methodology. The survey is based on the theoretical and graphical modelling of product space perception by consumers. It investigates changes of the latter under different marketing strategies of a seller. Statistical methods are used to analyse trends of demand and prices for iPhones' changes, as well as dynamics of electricity consumption. Results. The paper reveals two facing approaches to the definition of relevant temporal market: 1) the discrete one that provides a short-run analysis of products' substitutability and combines only those time periods that are characterized by a stable balance of demand and supply, as well as stable market equilibrium; 2) the coherent one that provides a long-run analysis of cyclical variation of the market. This cycling is based on the awareness of consumers and producers of intertemporal substitutability of products. The authors use the model of intertemporal competition to explain principles of these approaches and apply it to the iPhone market analysis. They conclude that the coherent approach must be applied to the temporal market definition for the products with elastic demand. Inelastic demand brings the necessity to apply the discrete approach to the temporal market definition. These conclusions cannot be applied to regulated markets. The system of government regulation is the main determinant of the temporal boundaries of such markets. Practical implications. The results of this research can be used by competition agencies in antitrust cases to define the relevant temporal market, where the violations of antitrust legislation can occur. The correct definition of the market is the first step of structural analysis under antitrust cases that determinates the correctness of its next steps and finally - accurate labelling of an antitrust violation. Value/originality. The paper grounds capability of both (discrete and coherent) approaches to the relevant temporal market definition, determines the factors that define what the approach must be chosen, as well as the exceptions from the rule.

Suggested Citation

  • Anzhelika Gerasymenko & Svitlana Afendikova, 2018. "The Relevant Temporal Market Definition In Antitrust Analysis," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 4(1).
    • Handle: RePEc:bal:journl:2256-0742:2018:4:1:9
    DOI: 10.30525/2256-0742/2018-4-1-68-76
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    References listed on IDEAS

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    3. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    4. Russo, Francesco & Stasi, Maria Luisa, 2016. "Defining the relevant market in the sharing economy," Internet Policy Review: Journal on Internet Regulation, Alexander von Humboldt Institute for Internet and Society (HIIG), Berlin, vol. 5(2), pages 1-13.
    5. Thomaz Teodorovicz & Tainá Leandro & Luiz Alberto Esteves, 2016. "The Evolution Of A Methodology For Relevant Market Definition: An Analysis Of Cade'S Jurisprudence On Private Higher Educational Markets," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 137, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
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    Cited by:

    1. Larysa Lebedeva & Oleksandra Moskalenko, 2021. "Impact Of The Covid-19 Pandemic On The Industrial Sector: Implications For Economic Policy," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 7(5).

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    More about this item

    Keywords

    relevant market; temporal market; intertemporal competition; peak and off peak services; intergenerational products;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • L49 - Industrial Organization - - Antitrust Issues and Policies - - - Other
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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