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Sequential Versus Simultaneous Market Delineation: The Relevant Antitrust Market for Salmon

Author

Listed:
  • Niels Haldrup

    (University of Aarhus)

  • Peter Mollgaard

    (Copenhagen Business School Centre for Industrial Economics, Copenhagen Economics ApS, Visiting Professor at CCP)

  • Claus Kastberg Nielsen

    (Copenhagen Economics ApS)

Abstract

Delineation of the relevant market forms a pivotal part of most antitrust cases. The standard approach is sequential. First the product market is delineated, then the geographical market is defined. Demand and supply substitution in both the product dimension and the geographical dimension will normally be stronger than substitution in either dimension. By ignoring this one might decide first to define products narrowly and then to define the geographical extent narrowly ignoring the possibility of a diagonal substitution. These reflections are important in the empirical delineation of product and geographical markets. Using a unique data set for prices of Norwegian and Scottish salmon, we propose a methodology for simultaneous market delineation and we demonstrate that compared to a sequential approach conclusions will be reversed.

Suggested Citation

  • Niels Haldrup & Peter Mollgaard & Claus Kastberg Nielsen, 2005. "Sequential Versus Simultaneous Market Delineation: The Relevant Antitrust Market for Salmon," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2005-02, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:ueaccp:2005_02
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    References listed on IDEAS

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    4. Franses, Philip Hans & Haldrup, Niels, 1994. "The Effects of Additive Outliers on Tests for Unit Roots and Cointegration," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(4), pages 471-478, October.
    5. Haldrup, Niels, "undated". "Empirical analysis of price data in the delineation of the relevant geographical market in competition analysis," Economics Working Papers 2003-9, Department of Economics and Business Economics, Aarhus University.
    6. Steen, Frode & Asche, Frank, 2006. "When Anti-Dumping Measures Lead to Increased Market Power: A Case Study of the European Salmon Market," CEPR Discussion Papers 5781, C.E.P.R. Discussion Papers.
    7. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
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    Cited by:

    1. Willem H. Boshoff, 2007. "Stationarity Tests In Geographic Markets: An Application To South African Milk Markets," South African Journal of Economics, Economic Society of South Africa, vol. 75(1), pages 52-65, March.
    2. Zipitria, Leandro, 2010. "New Directions in Price Test for Market Definition," MPRA Paper 58046, University Library of Munich, Germany.
    3. Vladimír Hajko & Jaroslav Bil, 2013. "The Relevant Markets for Meat Production and Processing in the Czech Republic: Analysis of the Price Movements," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 7(3), pages 178-197, November.

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    More about this item

    Keywords

    Relevant Market; Econometric Delineation; Salmon;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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