Critical Loss Analysis

By Malcolm B. Coate & Shawn W. Ulrick (U.S. Federal Trade Commission), John M. Yun (George Mason University) Critical loss analysis is an empirical tool used to define relevant markets in antitrust law. The existence of two different critical loss methodologies, however, complicates its application. Harris and Simons introduced the first approach, which focused on […]

This article is part of a Chronicle. See more from this Chronicle Gregory Werden, Apr 10, 2008 I recently argued in this magazine that a style of critical loss calculation I termed “CLAD” (Critical Loss Analysis by Defendants) does not properly implement the hypothetical monopolist test (HMT) for market delineation and is often highly misleading. […]

This article is part of a Chronicle. See more from this Chronicle Malcolm Coate, Jeffrey Fischer, Apr 01, 2008 This comment responds to two recent papers on critical loss in this magazine. The first, by Gregory J. Werden, cautions against the standard application of CL analysis. The second, by Kevin Murphy and Robert Topel, concludes […]

This article is part of a Chronicle. See more from this Chronicle Kevin Murphy, Robert Topel, Mar 17, 2008 In the matter of the U.S. Federal Trade Commission (FTC) versus Whole Foods (hereinafter Whole Foods), the economist for Whole Foods, Professor David Scheffman, applied “Critical Loss” (CL) analysis to the issue of market definition in […]

This article is part of a Chronicle. See more from this Chronicle Gregory Werden, Feb 25, 2008 The hypothetical monopolist test (HMT) for market delineation holds that a group of products and associated area constitute a market only if a profit-maximizing monopolist over them would increase price significantly. This test was prominently articulated in the […]