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Using Spatial Covariance Function For Antitrust Market Delineation

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  • Claudio R. Lucinda
  • Arthur Barrionuevo Filho

Abstract

In this paper, an estimation of a Spatial Covariance Function was proposed for determining the relevant geographic market for a merger. This methodology was applied to a proposed merger between two competing Brazilian supermarket chains. During this application, the shortcomings of the analysis carried out by the Brazilian Antitrust System were initially pointed out, including the geographic dimension of the relevant market, which was found to be separated in each municipality located on the shore of Sao Paulo state. The results, based on the estimated spatial covariance function using price data on 22 products in 43 supermarkets, indicate a single geographic market for all municipalities
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  • Claudio R. Lucinda & Arthur Barrionuevo Filho, 2006. "Using Spatial Covariance Function For Antitrust Market Delineation," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 125, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    • Handle: RePEc:anp:en2006:125
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    File URL: http://www.anpec.org.br/encontro2006/artigos/A06A125.pdf
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    References listed on IDEAS

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    1. Scheffman, David T & Spiller, Pablo T, 1987. "Geographic Market Definition under the U.S. Department of Justice Merger Guidelines," Journal of Law and Economics, University of Chicago Press, vol. 30(1), pages 123-147, April.
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    5. Froeb, L.M. & Werden, G.J., 1991. "Correlation, Causality, and all that Jazz: The Inherent Shortcomings of Price Tests for Antitrust Market Delineation," Papers 91-6, U.S. Department of Justice - Antitrust Division.
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    Cited by:

    1. Dennis Sánchez-Navarro, 2012. "Una propuesta metodológica para la definición de mercados geográficos relevantes," Estudios Económicos SIC 10492, Superintendencia de Industria y Comercio.

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