The hypothetical monopolist in a world of multi-product firms: Should outside companies be included in his basket?
Posted by D. Daniel Sokol
Adriaan ten Kate, Sr. and Gunnar Niels (Oxera) ask THE HYPOTHETICAL MONOPOLIST IN A WORLD OF MULTI-PRODUCT FIRMS: SHOULD OUTSIDE COMPANIONS BE INCLUDED IN HIS BASKET?
ABSTRACT: The hypothetical monopolist of the U.S. Horizontal Merger Guidelines not only is supposed to be the sole producer of the products inside the candidate market, but also is not supposed to produce any products outside that market. As most real-world firms produce multiple products, the transition from the prevailing situation to hypothetical monopoly implies both a hypothetical merger of all firms that produce inside products and a hypothetical spin-off of all outside products produced by those firms. Such a spin-off has a number of effects, which we discuss in detail for both substitute and complementary outside companions. We argue that these effects do not bring market definition any closer to its ultimate goal—that is, the assessment of market power. In our view, it is preferable to consider the hypothetical monopolist as an inclusive monopolist, resulting from the merger of all firms producing inside products but without any spin-off of companions. Such a monopolist captures the idea of the hypothetical cartel referred to in the 2010 version of the Guidelines, but is better suited to describe the issues at stake.
Featured News
Telefonica Germany Teams Up with Amazon Web Services to Migrate 5G Customers
May 8, 2024 by
CPI
Federal Judge Grants $7.4 Million Settlement in Pork Price-Fixing Case
May 8, 2024 by
CPI
Wilson Sonsini Bolsters Antitrust and Competition Practice with Key Partner Returns
May 8, 2024 by
CPI
EU to Scrutinize Telecom Italia’s Network Sale to KKR
May 8, 2024 by
CPI
Turkey Hits Meta with $37.20 Million Fine Over Data-Sharing Practices
May 8, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI