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Implementing Relevant Market Tests in Antitrust Policy: Application to Computer Servers


  • Ivaldi Marc

    (Toulouse School of Economics)

  • Lőrincz Szabolcs

    (European Commission, Directorate-General Competition)


The paper defines, implements and compares two empirical tests of relevant markets. While the SSNIP test compares an initial industry equilibrium to an out-of-equilibrium situation, the 1984 US Merger Guidelines test compares the same initial equilibrium to a second equilibrium outcome. We define these concepts formally and apply them to the computer server industry by estimating a model on a large dataset. We find several smaller relevant markets in the low-end segment of servers. In addition, we find that the results might be quantitatively significantly different between the two approaches as the SSNIP test changes prices uniformly and does not take into account the multi-product pricing strategies of the firms.

Suggested Citation

  • Ivaldi Marc & Lőrincz Szabolcs, 2011. "Implementing Relevant Market Tests in Antitrust Policy: Application to Computer Servers," Review of Law & Economics, De Gruyter, vol. 7(1), pages 29-71, April.
  • Handle: RePEc:bpj:rlecon:v:7:y:2011:i:1:n:3

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    References listed on IDEAS

    1. Cardell, N. Scott, 1997. "Variance Components Structures for the Extreme-Value and Logistic Distributions with Application to Models of Heterogeneity," Econometric Theory, Cambridge University Press, vol. 13(02), pages 185-213, April.
    2. Igal Hendel, 1999. "Estimating Multiple-Discrete Choice Models: An Application to Computerization Returns," Review of Economic Studies, Oxford University Press, vol. 66(2), pages 423-446.
    3. Ivaldi, Marc & Verboven, Frank, 2005. "Quantifying the effects from horizontal mergers in European competition policy," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 669-691, December.
    4. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
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    Cited by:

    1. Polk, Andreas & Bilotkach, Volodymyr, 2013. "The assessment of market power of hub airports," Transport Policy, Elsevier, vol. 29(C), pages 29-37.
    2. Pereira, Pedro & Vareda, João, 2013. "How will telecommunications bundles impact competition and regulatory analysis?," Telecommunications Policy, Elsevier, vol. 37(6), pages 530-539.
    3. Lapo Filistrucchi, 2008. "A SSNIP test for two-sided markets: the case of media," Working Papers 08-34, NET Institute, revised Oct 2008.

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