UPDATE: The paper was selected by Concurrences as the best academic antitrust economics paper of 2020, and is forthcoming in the Antitrust Law Journal volume 83, number 2.
Antitrust aficionados may want to have a look at this new paper (“The Logic of Market Definition”) that I have co-authored with Sean Sullivan of the University of Iowa School of Law about defining relevant antitrust markets. The paper is now posted on SSRN.
Here is the abstract:
Despite the voluminous commentary that the topic has attracted in recent years, much confusion still surrounds the proper definition of antitrust markets. This paper seeks to clarify market definition, partly by explaining what should not factor into the exercise. Specifically, we identify and describe three common errors in how courts and advocates approach market definition. The first error is what we call the natural market fallacy: the mistake of treating market boundaries as preexisting features of competition, rather than the purely conceptual abstractions of a particular analytical process. The second is the independent market fallacy: the failure to recognize that antitrust markets must always be defined to reflect a theory of harm, and do not exist independent of a theory of harm. The third is the single market fallacy: the tendency of courts and advocates to seek some single, best relevant market, when in reality there will typically be many relevant markets, all of which could be appropriately drawn to aid in competitive effects analysis. In the process of dispelling these common fallacies, this paper offers a clarifying framework for understanding the fundamental logic of market definition.
Uneasy Money 