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Journal of Competition Law and Economics Advance Access originally published online on September 15, 2008
Journal of Competition Law and Economics 2009 5(2):297-333; doi:10.1093/joclec/nhn029
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© The Author (2008). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

THE RELEVANT MARKET: A CONCEPT STILL IN SEARCH OF A DEFINITION

Adriaan ten Kate * and Gunnar Niels **

Correspondence: E-mail: adtenkate{at}hotmail.com

JEL: D42, K21, L20

We identify some shortcomings of the hypothetical monopolist definition (HMD) of the relevant market as set out in the 1992 U.S. Merger Guidelines and followed by competition regimes worldwide, and propose a rephrased version to give the HMD a greater scientific rigor. It is shown that market boundaries under the HMD depend significantly on supply-related factors (such as pre-merger competitive interaction and the shape of cost functions), contrary to the claim in the Guidelines that market definition focuses solely on demand substitution factors. We formulate two alternative definitions of relevant market that build on the same logic as the HMD but do depend only on demand factors.

* Independent consultant, Mexico.

** Director at Oxera, Oxford, UK. E-mail: gunnar.niels{at}oxera.com. We would like to thank Gregory Werden for his critique of our article. The views expressed here are ours alone.


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