#65 How We Define Markets

Before you can conclude that a merger will result in a monopoly, you have to first ask a monopoly of what ? Market definition is the analytical fulcrum that almost everything else in a merger case rests upon. Kirkland & Ellis LLP's Mike Singer and Cornerstone Research's Nathaniel Hipsman join host Anant Raut to explain how economists use the hypothetical monopolist and SSNIP tests to define markets. They then discuss the strengths and shortcomings of the tests, as well as the famous "cellophane fallacy" where the competitive price may actually be the monopoly price in disguise. With special guests: Michael B. Singer, Partner, Kirkland & Ellis LLP and Dr. Nathaniel E. Hipsman, Principal, Cornerstone Research Hosted by: Anant Raut