Sequential versus simultaneous market delineation: the relevant antitrust market for salmon

Delineation of the relevant market constitutes a pivotal part of most antitrust cases. The standard analysis utilizes a sequential approach. First, the product market is delineated; then the geographical market is defined. Demand and supply substitution in both the product dimension and the geographical dimension will normally be stronger than substitution in either dimension. By ignoring this, one might decide first to define products narrowly and then define the geographical extent narrowly, ignoring the possibility of a diagonal substitution. These reflections are important in the empirical delineation of product and geographical markets. Using a unique dataset for prices of norwegian and scottish salmon, we propose a methodology that allows for simultaneous market delineation. We then show that market delineation may depend on the choice of method: a simultaneous method reverses the conclusions of a sequential approach as regards the delineation of the market for atlantic salmon in europe.