Skip Navigation



Journal of Competition Law and Economics Advance Access published online on November 30, 2007
Journal of Competition Law and Economics, doi:10.1093/joclec/nhm032
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
4/2/263    most recent
nhm032v3
nhm032v2
nhm032v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Daljord, O.
Right arrow Articles by Thomassen, O.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author (2007). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

THE SSNIP TEST AND MARKET DEFINITION WITH THE AGGREGATE DIVERSION RATIO: A REPLY TO KATZ AND SHAPIRO

Øystein Daljord *, Lars Sørgard ** and Øyvind Thomassen {dagger}

The Hypothetical Monopolist or Small but Significant Non-transitory Increase in Prices (SSNIP) test defines the relevant market by determining whether a given increase in product prices would be profitable for a monopolist in the candidate market. The U.S. Merger Guidelines do not specify whether the SSNIP test should be performed with an increase in one price, some prices, or all prices in the candidate market. We argue that this should depend on characteristics of the market: if there are asymmetries between products, increasing only one price might be the best way to identify competitive constraints. Katz and Shapiro derive a one-price test criterion of critical loss in terms of the aggregate diversion ratio. Unfortunately, the derivation is incorrect. We show what the correct criterion should be.

* Economist, Norwegian Competition Authority. E-mail: oeda{at}kt.no

** Professor of Economics, Norwegian School of Economics and Business Administration, and Economist, Norwegian Competition Authority. E-mail: lars.sorgard{at}nhh.no

{dagger} PhD student in Economics, University of Oxford. E-mail: oyvind.thomassen{at}economics.ox.ac.uk. This paper presents our personal views, which are not necessarily shared by the Norwegian Competition Authority.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?




Disclaimer:
Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.