Market De nition in a Two-Sided Market: The Case of Newspapers

Transcription

1 Market De nition in a Two-Sided Market: The Case of Newspapers Elena Argentesi Lapo Filistrucchi y 31 March 2010 Abstract The paper rst discusses the design and implementation of a SSNIP test in a two-sided market such as the media one. Then it applies the proposed SSNIP test for two-sided markets to the newspaper market, using a unique dataset on daily newspapers in Italy. The paper therefore not only provides guidance on the implementation of a SSNIP test in a two-sided market, but it also brings an example of structural demand estimation for the purpose of market de nition. DRAFT - PLEASE DO NOT CITE OR QUOTE University of Bologna. Address: Department of Economics, Piazza Scaravilli 2, I Bologna. elena.argentesi@unibo.it. y Tilburg University and University of Florence. Address: Tilburg University, Department of Economics, P.O. Box 90153, 5000 LE Tilburg, The Netherland. L.Filistrucchi@uvt.nl.

2 1 Introduction In recent years, several antitrust cases have involved two-sided markets. Examples include the Google/DoubleClick merger, the Lagardère/Natexis/VUP merger, the Vivendi/Canal+ merger. Since several recent papers have proved that standard economic results do not apply in two-sided markets, a new economic and econometric framework is necessary to deal with such cases. One of the most important issues in this context is market de nition, not only because technological progress is rapidly changing the boundaries of these markets, but also because the existence of two groups of consumers linked by indirect network e ects raises the issue of how to de ne a market on each side. Many recent competition policy cases, such as the announced merger between the two main Dutch ower auction houses, Bloemenveiling Aalsmeer and FloraHolland, 1 the one between the London Stock Exchange and the Milan Stock Exchange 2 or the merger between Google and DoubleClick, 3 all call for both theoretical and empirical guidance on the design and implementation of a SS- NIP test in two-sided markets. A correct product market de nition in two-sided markets was also crucial in many recent competition policy or regulatory cases in the payment cards market, such as that on tying between debit and the credit cards in the US and those on interchange fees in Australia and in the EU, whereas a correct geographic market de nition is relevant for the implementation of the Single European Payment Area (S.E.P.A.) for retail payments. Last but not least, a correct market de nition is crucial in designing regulation in the media market, in light of the progresses in information and communication technologies. In most economic models the relevant market is simply assumed. In practice however it is of great importance for any antitrust case. A wrong de nition of the relevant market might for instance lead the antitrust authority or the courts 1 Netherlands Competition Authority Decion N. 5901/ AGCM Decision n dated 3 August US: FTC File No , decision dated 20 December 2007; EU: Case No. COMP/M.4731, Commission decision of 11/03/

3 to blocking a welfare enhancing merger or to allowing a welfare detrimental one. Also, in case of appeal, the recognition of a wrong market de nition is su cient for the courts to reject the whole analysis and rule in favour of the parties irrespective of any other argument brought up by the antitrust authority. 4 Market de nition is therefore the founding stone on which an antitrust case is built. We argue that in a two-sided market the traditional Small-but-Signi cant Non-Transitory Increase in Price test (the so-called SSNIP test, also known as the Hypothetical Monopolist test) cannot be applied as it is usually conceived. That is because a rm in a two-sided market faces two products or services at two distinct group of consumers and recognises that the demand from one type of consumers depends on the demand from the other type of consumers and vice versa. Such a link is therefore present in the pro t function of a hypothetical monopolist who raises the price in a signi cant and non-transitory way on one side of the market and cannot be neglected in the assessment of the relevant market (see below, on the model). In this paper we propose a new framework for market de nition in two-sided markets. We suggest that, in order to maintain the original rationale, a SSNIP test in a two-sided market should take into account changes in pro ts on both sides of the market and all feedbacks between pro ts on the two sides of the market following the hypothetical monopolist increase in prices. In addition it should be implemented by raising rst the price on one side of the market then the price on the other side of the market, each time allowing the hypothetical monopolist to optimally adjust the price structure. We then derive the corresponding formulas, estimate relevant demand parameters (including network e ects) and use both to perform the SSNIP test in the market for daily newspapers in Italy. 4 For example, in a 2002 case concerning Aberdeen Journals the Competition Commission Appeal Tribunal set aside a previous decision and remitted the issue of market de nition back to the Director for further consideration ( nal Decision of the Director General of Fair Trading No. CA98/144/2002). In this case the issue was geographical market de nition on the advertising side, while the readers side of the market was neglected in the decision. Also in the Archant/Independent News and Media neither the OFT nor the Competition Commission consider explicitly the readers side of the market. 2

4 There are di erent types of two-sided markets. In particular, payment-card type markets di er from media-type markets in the direction and magnitude of indirect network e ects and in the presence of multi-homing versus singlehoming (see Filistrucchi, 2008). We cannot therefore apply the same methodology to all these cases. In this paper we focus on two-sided markets of the media type. A media rm typically operates in a two-sided market as it sells content to readers/viewers and advertising space to advertisers and it knows that the size (and possibly the characteristics) of the audience in uences the demand for advertising space while vice versa the amount of advertising might in uence the demand from the audience. In other words, it recognises the existence of indirect network e ects between the two-sides of the market. In particular, we apply the proposed SSNIP test for two-sided markets to the newspaper industry by building a structural model which encompasses a demand estimation for di erentiated products on both sides of the market and where pro t maximization by the hypothetical monopolist takes into account the interactions between them. We look at the Italian market for daily newspapers and test whether a structural SSNIP test supports the traditional classi cation of national newspapers into a) those of general interest b) the nancial ones and c) the sport ones. Such a market de nition was originally devised by the Italian Federation of Newspapers Publishers (F.I.E.G.) and used by the Italian Antitrust Authority several cases. The remainder of the paper is as follows. Section 2 reviews the relevant literature on two-sided markets and on market de nition. Section 3 presents our proposed methodology to implement the SSNIP test in a two-sided market of the media type. Section 4 describes the dataset used. The econometric model used to estimate demands is discussed in section 5, while section 6 presents simulations of price increases on pro ts. Section 7 concludes. 3

5 2 Related literature Following the seminal works by Caillaud & Jullien (2003), Armstrong (2006), Parker & Van Alstyne (2002) and Rochet & Tirole (2003, 2006), a growing number of papers have dealt with theoretical aspects of two-sided markets, e.g. Anderson & Gabszewicz (2006) and Guthrie & Wright (2007). Some of them, such as Evans (2003), Wright (2004) and Evans & Schmalensee (2007), have focused on competition policy issues in two-sided markets. They have pointed out for instance that, unlike the price level, due to the presence of indirect network externalities, the e cient price structure does not re ect the ratio of marginal costs on the two sides of the market and, more generally, that increased competition does not necessarily lead to a more balanced price structure nor to a more e cient one. Most other policy contributions so far, except Emch & Thomson (2006), Evans & Noel (2005; 2008), have mainly criticized the application of standard competition policy results to two-sided markets rather then suggesting alternative ones and, from the practical point of view, they argued against existing practice rather than providing new methods to practitioners. As for the empirical work, Rysman (2004) studies the market for Yellow Pages and shows that networks e ects between advertisers and readers are indeed present. It also considers whether the market bene ts from monopoly (which takes advantage of network e ects) or oligopoly (which reduces market power) and nds that a more competitive market is preferable. Argentesi & Filistrucchi (2007), who propose a structural econometric model to test for collusion among the four main national daily newspapers of general interest in Italy and conclude that in the period under consideration they have been colluding on the cover price but not on the advertising one. Chandra and Collard- Wexler (2008) propose a structural econometric model to analyse welfare e ects of mergers between Canadian newspapers and conclude that they did not lead to increased allocative ine ciency. Most of the other scarce empirical work on two-sided markets concentrates on testing for the presence of the indirect network e ects, e.g. Rysman (2007), Ackerberg & Gowrisankaran (2006) and 4

6 Kaiser & Wright (2006). Despite the rich literature on two-sided markets, only a few papers have dealt with market de nition in two-sided markets. Argentesi & Ivaldi (2007) discuss the issue in the context of the media market. Their paper however mainly argues for the need to take into account indirect network externalities in order to get unbiased estimates of the own and cross price elasticities of demand. They then present supporting results from a simple econometric exercise on a dataset of French newspapers in order to support their claim. Evans & Noel (2008) argue for the need to take into account feedbacks between the two sides of the markets due to demand externalities and point to the di culties arising in market de nition when two-sided platforms compete with standard rms on one side of the market. They do not however propose general rules for the implementation of the SSNIP test in two-sided markets. Emch & Thomson (2006) discuss the design of a SSNIP test in the payment cards market and propose to apply the SSNIP test to the total price charged by the hypothetical monopolist while letting relative prices on the two sides of the market adjust optimally. Their paper however does not discuss the case of other markets and considers only transaction fees and not adoption fees. Evans & Noel (2008) propose a way to extend the Critical Loss Analysis (a way to implement the SSNIP test) to two-sided platforms and derive the corresponding formulas. They propose to perform CLA by raising each price separately while keeping the other xed and to take into account all feedbacks. They then illustrate the bias due to not taking into account feedbacks between the two-sides of the market. The main di erence from our approach and Evans and Noel (2008) is that we perform a structural estimation of demand parameters, whereas they cannot rely on reliable data and therefore infer elasticities of demand from price-cost margins. This paper builds in particular on Filistrucchi (2008) which discusses the design and implementation of a SSNIP test in two-sided markets in light of the original rationale for the SSNIP test and proposes a distinction between two types of two-sided markets: a) the payment card type (where there is a 5

7 transaction between the two end-consumers of the payment card service, e.g. a cardholder buys a good from a shop) and b) the media type (where the transaction is not present or is unobservable, e.g. a reader reads an ad). It then derives the corresponding formulas for the SSNIP test, Critical Loss Analysis and Critical Elasticity Analysis. The paper also draws from Argentesi & Filistrucchi (2007), where the authors test for market power in the national daily newspaper market in Italy. That paper however took the traditional market de nition as given. Finally, our paper extend the methodology for structural estimation of market de nition proposed by Brenkers and Verboven (2005) and Ivaldi and L½orincz (2007) to the context of two-sided markets. [...] 3 The SSNIP test in two-sided markets The traditional SSNIP test for de ning relevant markets should be modi ed in order to be applied to two-sided markets. The indirect network externality between the two sides of the market may reduce the pro tability of a price increase on one side because, by reducing demanded quantity on that side, it reduces the price that customers are willing to pay on the other side of the market. Media markets di er by other two-sided markets in that there is no real transaction between end-users in the two sides, as the audience is interested in content and has at best a secondary interest for advertising. Moreover, a di erent market de nition for the two sides is possible in media markets but not in other two-sided markets like the payment-card market. In other words, a credit card is either in the relevant market on both sides or not, whereas for instance TV might be a substitute for newspapers for an advertiser (who just cares to reach potential customers) but not for a reader/viewer. For these reasons the SSNIP test should be applied di erently to di erent types of two-sided markets. Since in media markets the relevant market could 6

8 di er between the two sides, in these markets the hypothetical monopolist should be thought as raising rst one of the two prices and then the price on the other side (contrary to what Emch and Thompson (2006) propose for the payment cards market, where it is appropriate to think of a hypothetical monopolist raising both prices at the same time). Moreover, as agued by Filistrucchi (2008), when applying the SSNIP test to media markets one should allow the hypothetical monopolist to optimally adjust the price structure (instead than keeping the price on the other side xed as in Evans and Noel, 2008). As already noticed by Evans and Noel (2008), the implementation of the SSNIP test in two-sided markets presents several problems. One of these is whether one should take into account both sides of the business or just one side in the market de nition. In theory, as claimed in by Evans and Noel (2008) and by Filistrucchi (2008), we believe that indeed one should take into account both sides, as they are linked by network externalities. However, the indirect network e ect between the two sides of the market may go only in one direction, as it is most likely the case in daily newspapers, since advertising can be skipped quite easily in daily newspapers (so that it should not have a negative impact on readers) and it is not targeted as well as in magazines (which would imply a positive e ect on readers). 5 If this is the case, a price increase on the advertising side would not have even an indirect impact on readers demand. If so, it would then make more sense to start the SSNIP test from the advertising side, i.e. by considering variations of advertising prices. One could then proceed to de ne the readers market, given the market de nition on the advertising side. Another issue, which is relevant for both the EU and the US version of the SSNIP test, is whether to allow the hypothetical monopolist to reoptimize prices across sides and across platforms. Indeed in the context of media markets, we believe that the hypothetical monopolist should be thought of raising rst the 5 In Argentesi and Filistrucchi (2007) we did not nd any signi cant e ect of advertising quantity on readers demand for Italian newspapers. Since we now have a richer dataset on both sides of the market and a better measure of advertising quantity (and possibly a measure also of newspaper content that we did not have in the previous dataset) we will be able to quantify more precisely the impact of advertising quantity on readers demand. 7

9 price on one side then that on the other side, but she should be allowed to adjust optimally the price structure across the two sides. In a two-sided market with n candidate products j = 1; 2; :::; n for the relevant market on each side m = A; B of the market, the pro ts of a hypothetical monopolist are: = p A d A (p A ; d B ) + p B d B (p B ; d A ) C(d A ; d B ) where p A and p B, d A and d B are the prices and the demands on the two sides of the market respectively. If it is possible to solve the demand system explicitly, the pro t function can be rewritten as: = p A q A (p A ; p B ) + p B q B (p A ; p B ) C(q A (p A ; p B ); q B (p A ; p B )) The SSNIP test has two slightly di erent interpretations in the US and in the EU, which in theory might lead to a di erent de nition of the relvant market when applied to the same data. The EU version of the test 6 de nes a relevant market as a set of products whose prices can be pro tably jointly raised by a hypothetical small amount (5 to 10%) in a permanent way. In contrast the US version of the test de nes the relevant market as the set of products whose prices would be signi cantly and permanently raised at equilibrium by a hypothetical, pro t-maximizing, monopolist. 7 In the US approach, the question is not whether a small price increase would be pro table, but whether the pro t maximizing hypothetical rm would indeed increase the prices by at least the small price increase. It is somewhat a debated issue whether one should then consider the market to be de ned when the optimal price increase of at least one product is higher than the 5% or 10% benchmark or when the price of all products is raised by more than that benchmark. According to some authors, e.g. Ivaldi and L½orincz (2008), the US test does not require the hypothetical 6 EU Commission (1997). 7 The references are the 1984 US Merger Guidelines later modi ed by the 1992 Merger Guidelines. See Werden (2003) for a discussion. 8

10 monopolist to raise the prices of all products by the same amount. 8 According to others, e.g. Evans and Noel (2008), the US merger guidelines prescribe uniform price increase across all products. This di erence too can in theory bring to di erent market de nitions. In the empirical part we will indeed test whether it is so in practice for the case of the Italian newspaper market. EU version of the SSNIP test In order to implement the EU version of the SSNIP test, we should check the variation of pro ts in response to a price variation of 5% (or 10%). This is what Brenkers and Verboven (2006) do in a one-sided market context. Our claim is that if we want to de ne the market on side A, we should perform the SSNIP test allowing the monopolist to adjust optimally the price on side B. Therefore we should check the e ect on pro ts of a given price increase (5% or 10%), which entails checking the sign of: = p 1 A + pa p A ; g B p A 1 + pa p A (p A ; p B ) where p A and p B are the vectors of prices on side A and B of the platforms owned by the monopolist and g B (:) is the optimal price on side B for any price charged on side A. US version of the SSNIP test The US version of the SSNIP test, we should instead check whether a pro t-maximizing hypothetical monopolist would raise the price more than a given threshold, i.e. if: p A p A = pa p A p A > 5% or 10% where p A and p B are the vectors of the pro t-maximizing prices set by the hypothetical monopolist for side A and side B of the platforms she owns (see discussion above). In order to apply the SSNIP test to a two-sided market, we build a structural model which encompasses a demand estimation on both sides of the market and 8 Ivaldi and L½orincz (2008) show that this di erence between the two test may lead to di erent market de nition under the two approaches. 9

11 where pro t maximization by the hypothetical monopolist takes into account the interactions between them. We apply a similar procedure to Brenkers and Verboven (2006), which tests for relevant markets in the EU car market. We use a similar methodology but in a two-sided context. The econometric approach amounts to estimating a demand system and carry out the SSNIP test by selecting a small set of products as the candidate relevant market. We compute current joint pro t on the basis of the estimated elasticities and compare them with new joint pro ts after a price increase of a given percentage (5% or 10%). [...] 4 The data The dataset contains, on the readers side of the market, market level data on circulation, cover prices and content characteristics of seven daily newspapers in Italy with monthly observations for each di erent day of the week from 1990 to Four of these newspapers (Il Corriere della Sera, La Repubblica, La Stampa and Il Giornale) are classi ed by the Italian publishers Asssociation (FIEG) as generalist, two of them (La Gazzetta dello Sport and Il Corriere dello Sport) are sports newspapers and Il Sole 24Ore is the main nancial newspaper. Data on circulation come from those collected for advertising purposes by Accertamenti Di usione Stampa (ADS). We collected from newspaper publishers information on the cover prices of the newspapers, on content characteristics such as the dates regular supplements were introduced, on other promotions with the corresponding periods, on the changes of editors, on the presence of local sections and on the dates of the opening of the newspapers websites. On the advertisers side of the market, we use market level data on advertising quantity, prices and readers characteristics of those same newspapers with monthly observations for each di erent day of the week from 1990 to Data 9 We use data on printed copies instead of circulation because the latter are not available by day of the week.as discussed in Argentesi and Filistrucchi (2007) the correlation between these two variables is very high. 10

12 Variable Obs Mean Std. Dev. Min Max year month day prints price ads adpr mod adprmod Figure 1: Table 1 - Descriptive statistics (all newspapers) on advertising quantities 10 and advertising prices net of estimated discounts come from the database of Nielsen Media Research, while data on readers demographics come from Audipress surveys. We also have data on advertising prices and quantities for television and magazines as aggregates (monthly observations for each di erent day of the week from 1990 to 2006). We also have monthly information on the cost of paper which we could possibly use as one of the instruments for prices, although it captures variability only through time. Finally, the data on aggregate cost necessary for the simulation of the e ect on pro t of a small signi cant non transitory increase in prices are derived from the publishers balance sheet and are published by the Italian publishers Association (FIEG). 5 Demand model [...] In order to perform our pro t simulations, we need to estimate demand paramenters and in particular own- and cross-elasticities both on the readers side and on the advertising side. 10 We have three di erent measures for advertising quantities, namely number of ads, number of pages and number of slots. 11

13 Variable Obs Mean Std. Dev. Min Max year month day prints price ads adpr mod adprmod Figure 2: Table 2 - Descriptive statistics (generalist newspapers) Variable Obs Mean Std. Dev. Min Max year month day prints price ads adpr mod adprmod Figure 3: Table 3 -Descriptive statistics (economic newspapers) Variable Obs Mean Std. Dev. Min Max year month day prints price ads adpr mod adprmod Figure 4: Table 4 - Descriptive statistics (sport newspapers) 12

14 In Argentesi & Filistrucchi (2007), readers demand was estimated using a nested logit model on the two sides of the market and the robustness of the nding of collusion on cover prices was tested by simulating random errors in the matrix of estimated own and cross elasticities. A similar approach is used by Brenkers and Verboven (2008), which compares a simple logit with two di erent versions of the nested logit model. As a rst step, we make use of a similar model to estimate readers demand. This model allows consumer tastes to be correlated across products (which is not the case for the simple logit model), by grouping products according to some observable characteristics which are expected to make them closer substitutes for consumers. In order to build the nests, we rely on the classi cation adopted by the Italian publishers Association and by the Italian antitrust agency, 11 which classi es newspaper in generalists, sports, and business. In our case, it seems reasonable to assume that the outside good (buying no national newspaper at all) constitutes one nest, whereas the seven newspapers considered belong to the other three nests: generalists (Il Corriere della Sera, La Repubblica, La Stampa and Il Giornale), sports newspapers (La Gazzetta dello Sport and Il Corriere dello Sport), and the nancial newspaper (Il Sole 24Ore). This amounts to assuming that readers choose whether to buy a national newspaper at all, and whether which type of newspaper to buy among those available on the market. This implies that, for given market shares, consumers substitute more toward other newspapers within each group than toward newspapers belonging to other groups. The demand equation for the nested logit model is: ln(s it ) ln(s 0t ) = x it + p it + ln(s itjg ) + it (1) where s it is the market share of newspaper i at time t, s 0t = 1 P i s it is the market share of the outside good, x it and it denote observed and unobserved characteristics respectively, p it is cover price, and s itjg is the share of newspaper 11 See Provv. n Ballarino/Grandi quotidiani (26/10/1996), Provv. n Italia Oggi Editori/Il Sole 24 Ore (20/3/1997). 13

15 i within group g. The market shares s it are de ned over the total potential market size, which is considered to be the total population in Italy older than 14 years, as it is usual in studies on the media market. The within-group market shares s itjg are instead de ned over the total circulation in each group of newspapers considered in the analysis. The parameter 2 [0; 1) measures the correlation of utility within each group (if tends to 1 newspapers within a group are perfect substitutes, whereas if is equal to 0 they are independent and we are in the simple logit case). The dependent variable is therefore the (log) market share of newspaper i at time t relative to the (log) market share of the outside good. Given the panel structure of the data, the unobservable component it can be decomposed as it = i + " it (2) where i is a xed product-speci c component correlated with x it and " it is an i.i.d. error term varying across newspapers and time. Given that cover prices and within market shares are potentially endogenous, we can use the sum of the content characteristics of the other newspapers as instruments, as it is common in the literature on discrete-choice models of product di erentiation (see for example Berry, 1994; Nevo, 2000; Ivaldi and Verboven, 2005). An alternative speci cation of a nested logit model would be to estimate a two-level nested logit, 12 where in the rst level consumers have the choice between buy a newspaper or not buying any newspaper at all, and once they have chosen to buy a newspaper they choose their preferred type of newspaper. In the nested logit models described above, consumers are assumed to purchase one unit of the newspaper that gives them the highest utility. This assumption seems reasonable in the case of few similar newspapers, since multiple purchases are likely to be negligible, and since subscriptions and corporate buys of newspapers (which are typically multiple purchases) are very low in Italy. 12 This would be similar to the approach adopted by Brenkers and Verboven (2006). 14

16 However, it might be that multiple purchases (i.e. multi-homing) is an issue when we jointly consider newspapers of di erent genres. For this reason one may also think of an alternative speci cation of readers demand which estimate logit demand models separately for the di erent segments, as recently done by Kaiser and Song (2009) for German magazines. In this case, the de nition of the ouside good could vary from one segment to the other (for instance, for sports newspapers we could use the number of males above 14 years of age instead than total population above the age of 14). As to advertising demand, we can start by adopting a simple logit speci cation, as we did in Argentesi and Filistrucchi (2007). Adopting a logit speci cation for the demand of advertising, the estimating equation for the advertising market is: ln(s A it) ln(s A 0t) = x A it A A p A it + A it + y N it (3) where s A it is the number of advertising slots of newspaper i at time t relative to the total potential market size, p A it is the advertising price, xa it and A it are the observed and unobserved characteristics respectively (i.e. the characteristics of the newspaper which may a ect advertising demand). Total potential market size for advertising is de ned as the market of daily publications. The model takes into account the fact that the demand of advertising space depends positively on the circulation of the newspaper (yit N ), which in turn depends on the vector of newspaper prices. We can use the sum of readers characteristics of other newspapers and the number of free copies distributed by the publishers as instruments for advertising prices and circulation in the advertising demand equation. The assumptions behind the logit model might be stronger in the context of advertising than they are in the context of readers demand. In particular the assumption of single purchase could be more problematic when referred to the purchase of advertising space than when it refers to readers choice, because there might be advertisers who buy slots in more than one newspaper (multihoming). For this reason we might try alternative speci cation of advertising 15

17 demand which allow for multi-homing. For instance, advertising demand could be speci ed generalizing Rysman (2004) as a function of advertising prices in a log-log fashion: ln(a it ) = x A it A A i ln p A it + X ij ln p A jt + i ln yit N + X ij ln yjt N + " A it (4) j6=i j6=i 5.1 Estimation results [...] 6 Simulation The supply side is modelled, similarly to Filistrucchi (2008), as a hypothetical monopolist setting prices on a two-sided market with di erentiated products on both sides. Pro ts on both sides of the market and all feedbacks between pro ts due to the indirect network e ect are taken into account. Similarly to Evans & Noel (2008), the SSNIP test is implemented by having the hypothetical monopolist raise rst the price on one side of the market then the price on the other side of the market, but contrary to Evans & Noel (2008) each time the hypothetical monopolist is allowed to optimally adjust the price structure. Following the logic of the SSNIP test in a single-sided market, we rst simulate a price increase by a monopolist which owns just one product and, as long as the price increase leads to estimated losses in pro ts, progressively increase the number of products owned by the monopolist. When pro ts are not estimated to decline following a small but signi cant increase in price by the hypothetical monopolist, the set of products owned by the monopolist in the last simulation is taken to constitute the relevant market. [...] 7 Conclusions [...] 16

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