Abstract
T he use of market share data to infer market power for purposes of antitrust analysis has received increasing attention from courts and commentators.1 In their recent Harvard Law Review article,2 William M. Landes and Richard A. Posner significantly advance the study of market power by providing a rigorous framework for understanding its determinants. Their approach measures market power using the Lerner index the percentage by which price exceeds marginal cost and thus implies that a dominant firm's market power is inversely proportional to the elasticity of demand for the firm's product.3 This approach permits Landes and Posner to study market power by examining the determinants of that elasticity. After conducting such an examination, they apply their formal economic analysis in an attempt to resolve recurrent market power issues. Their formal analysis of market power4 is useful, but many of their recommendations for an-
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