ABSTRACT
To assess single-firm market power and determine likely competitive effects of mergers and other conduct, antitrust law relies on market shares. Consequently, the assignment of market shares is an important task in most antitrust cases. This chapter explores the issues confronted in performing that task and offers concrete advice as to how best to assign shares. Assigning market shares often presents the figurative, or even literal, problem of adding apples and oranges. In practice, market shares often are assigned on a basis that is not quite a common denominator, either because there is none, or because expensive and time-consuming data collection would be required to utilize a true common denominator. In the mid-1960s, the Supreme Court established the critical importance of structural analysis and market share in monopolization cases. Shares assigned on the basis of revenues automatically account for efficiency and durability differences in a way, since the trade-offs made by marginal consumers are among the determinants of relative prices.
