Market definition

Market share thresholds are important in assessing whether an agreement restricts competition or not. The quantification of market shares demands firstly that the relevant markets are defined.

There are a number of quantitative tests that have specifically been designed for the purpose of delineating markets. These tests consist of various econometric and statistical approaches. EE&MC applies some or all of the following: 

  • estimates of elasticities and cross-price elasticities for the demand of a product,
  • tests based on similarity of price movements over time,
  • the analysis of causality between price series,
  • the analysis of similarity of price levels,
  • the analysis of convergence of price levels,
  • consumer preferences,
  • evidence of substitution in the recent past,
  • Hypothetical Monopolist test.