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Rubinfeld, Daniel L. --- "Current Issues in Antitrust Analysis" [2011] ELECD 341; in Drexl, Josef; Kerber, Wolfgang; Podszun, Rupprecht (eds), "Competition Policy and the Economic Approach" (Edward Elgar Publishing, 2011)

Book Title: Competition Policy and the Economic Approach

Editor(s): Drexl, Josef; Kerber, Wolfgang; Podszun, Rupprecht

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848448841

Section: Chapter 4

Section Title: Current Issues in Antitrust Analysis

Author(s): Rubinfeld, Daniel L.

Number of pages: 13

Extract:

4. Current issues in antitrust analysis
Daniel L. Rubinfeld

1. INTRODUCTION

The use of empirical methods to study competitive issues, especially those
relating to mergers, has been continually expanding in recent years. That
growth has not come without controversy, however. In this chapter, I
comment on three such issues. The first relates to market definition, the
second to the relevance of market power measures in unilateral effects
merger analysis, and the third to the use of merger simulation methods,
again in the context of unilateral effects analysis.
Market definition has historically been seen as a necessary, indeed
often crucial, first step in the analysis of mergers as well as non-merger
behaviour. I will point out, however, that there are circumstances in which
it is preferable to skip the definition of markets and move directly to the
analysis of competitive effects. With respect to market power, there has
been a view that HHIs and other measures of market concentration are
not especially relevant in unilateral effects analyses.1 I will suggest the
contrary ­ that HHIs can be instructive, even in the unilateral effects
context. Finally, there has been substantial debate about the use and
misuse of merger simulation methods. I will explain why I consider merger
simulation methods to be of continuing value, and I will discuss the
current debate as to which simulation approach is most useful.


2. MARKET DEFINITION

The exercise of market power requires that the firm or firms involved
(collectively) face a relatively inelastic demand curve ...