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Discussion Paper

No. 2010-5 | January 15, 2010
Price-Concentration Analysis in Merger Cases with Differentiated Products

Abstract

This paper considers the empirical assessment of the relationship between prices and number of firms in local markets in geographic or, more generally, characteristic space and its use as evidence in merger cases. It outlines a structural, semi-nonparametric econometric model of competition in such markets, examines its testable implications in terms of price-concentration relationships, and demonstrates that the model is non-parametrically identified. This general approach to price-concentration analysis in differentiated product markets is illustrated in a small-scale application to cinemas in the UK. The application highlights the main decision points faced by an authority when assessing the weight that can be attached to this type of analysis as evidence.

JEL Classification

C31 L11

Cite As

Walter Beckert and Nicola Mazzarotto (2010). Price-Concentration Analysis in Merger Cases with Differentiated Products. Economics Discussion Papers, No 2010-5, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2010-5

Assessment



Comments and Questions


Anonymous - Referee Report 1
March 04, 2010 - 11:07

see attached file


Walter Beckert - Reply to Referee Report 1
March 05, 2010 - 12:47

See attached file


Anonymous - Decision Letter
March 29, 2010 - 09:02

see attached file