Electricity Merger Analysis: Market Screens, Market Definition, and Other Lemmings

2008 ◽  
Vol 32 (3-4) ◽  
pp. 263-288 ◽  
Author(s):  
Darren Bush
Author(s):  
Jorge Padilla ◽  
Salvatore Piccolo ◽  
Pekka Sääskilahti

Abstract In a recent influential paper Coate et al. (2021) have criticized the sequential product-level approach to market definition in merger review. They argue that a simultaneous market-level approach to critical loss is more appropriate than a product-level critical loss analysis, because under certain plausible demand scenarios (nonlinear demand functions) the latter could yield the wrong answer on market definition—i.e., excessively broad or narrow markets. We extend their analysis by showing that a sequential product-level approach actually leads to an excessively narrow market definition when the typical nonlinear demand functions used in merger analysis are employed.


2020 ◽  
pp. 37-55 ◽  
Author(s):  
A. E. Shastitko ◽  
O. A. Markova

Digital transformation has led to changes in business models of traditional players in the existing markets. What is more, new entrants and new markets appeared, in particular platforms and multisided markets. The emergence and rapid development of platforms are caused primarily by the existence of so called indirect network externalities. Regarding to this, a question arises of whether the existing instruments of competition law enforcement and market analysis are still relevant when analyzing markets with digital platforms? This paper aims at discussing advantages and disadvantages of using various tools to define markets with platforms. In particular, we define the features of the SSNIP test when being applyed to markets with platforms. Furthermore, we analyze adjustment in tests for platform market definition in terms of possible type I and type II errors. All in all, it turns out that to reduce the likelihood of type I and type II errors while applying market definition technique to markets with platforms one should consider the type of platform analyzed: transaction platforms without pass-through and non-transaction matching platforms should be tackled as players in a multisided market, whereas non-transaction platforms should be analyzed as players in several interrelated markets. However, if the platform is allowed to adjust prices, there emerges additional challenge that the regulator and companies may manipulate the results of SSNIP test by applying different models of competition.


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