Unilateral Effects Analysis in Differentiated Product Markets: Guidelines, Policy, and Change

Unilateral Effects Analysis in Differentiated Product Markets: Guidelines, Policy, and Change The Merger Guidelines highlight unilateral effects analysis as the primary anticompetitive theory in differentiated product markets. This study evaluates the Federal Trade Commission’s historical record to determine what considerations drive the internal review process, if these considerations depend on the type of competition within the differentiated market under review, and if policy has changed much over the 20 years since the 1992 Merger Guidelines were issued. The results identify the importance of price-based competition to the analysis, as markets that are characterized by price competition tend to generate significantly higher estimates for the probability of a unilateral effects finding, all else equal, especially when repositioning is difficult. Moreover, a little fluctuation is detected in policy, but no real evidence of change over the 20-year period of the study exists. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Unilateral Effects Analysis in Differentiated Product Markets: Guidelines, Policy, and Change

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Publisher
Springer US
Copyright
Copyright © 2015 by Springer Science+Business Media New York (outside the USA)
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-015-9478-8
Publisher site
See Article on Publisher Site

Abstract

The Merger Guidelines highlight unilateral effects analysis as the primary anticompetitive theory in differentiated product markets. This study evaluates the Federal Trade Commission’s historical record to determine what considerations drive the internal review process, if these considerations depend on the type of competition within the differentiated market under review, and if policy has changed much over the 20 years since the 1992 Merger Guidelines were issued. The results identify the importance of price-based competition to the analysis, as markets that are characterized by price competition tend to generate significantly higher estimates for the probability of a unilateral effects finding, all else equal, especially when repositioning is difficult. Moreover, a little fluctuation is detected in policy, but no real evidence of change over the 20-year period of the study exists.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Aug 21, 2015

References

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