A Quantitative Methodology for Determining Relevant Geographic Markets in Higher Transportation Cost Industries

  • Charles River Associates Washington DC
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The U.S. Department of Justice/Federal Trade Commission Horizontal Merger Guidelines describes the hypothetical monopolist test (HMT) and significant and nontransitory increase in price (SSNIP) as tools to define antitrust markets. However, the discussion leaves some ambiguities with regards to the implementation of such tools. In this article, we present a methodology for quantitatively delineating geographic markets that is consistent with the Guidelines. In particular, for geographic markets that are based on the locations of customers, the market boundaries encompass the region into which sales are made from the merging parties’ plants, and competitors in the market are firms that sell to customers in the specified region. We use two approaches to identify the competitive reach of a plant—one based on actual shipping distances, which reflect the areas where the plant actually sells; and the other based on distances at which the plant’s product can be shipped profitably, which reflect all areas where the plant can potentially compete for customers. These distances are used to “draw circles” around plants to identify areas where one merging party plant’s competitive reach overlaps with the reach of another plant belonging to the merging partner, thus identifying the overlap customers. For each identified overlap customer area, the HMT is implemented using the critical loss analysis following a SSNIP by the hypothetical monopolist. We explain how to calculate the critical loss as well as the likely actual loss from the SSNIP.

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... These IoT devices are deployed in production environments and generate massive amounts of data, collectively referred to as IoT big data. These data are sent to the server for real-time stream processing and offline batch processing, which are used to assist and guide various industries for analysis and decision-making [10,11]. Its specific concept can be shown in Figure 1 (2) During the origin and development of the Internet of Things, its development process can be shown in the timeline made in Figure 2. It has developed for more than 20 years from the initial conceptual significance in 1995 to the real Internet of Everything today. ...
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With the development of information technology and the advent of the Internet of Everything era, more and more fields have begun to use the convenience of the Internet of Things to solve problems. International trade is a form of trade that develops rapidly under the world trade situation, and the optimization of transportation costs has always been an important issue to be solved in international trade. Wireless network virtualization (WNV for short) is an abstraction of the concept of wireless network connectivity. It allows remote users to access an organization’s internal network as if it was a physical connection. WNV has the characteristics of safety assurance, service quality assurance, scalability, flexibility, and manageability, and it has many advantages in the transportation industry. This paper is aimed at studying an IoT-assisted WNV technology to analyze the cost of international trade transportation. This paper proposes a resource optimization algorithm based on WNV and uses this algorithm to test the designed IoT-assisted WNV model. The test results show that using the WNV model can reduce the cost of transportation price by 3.13 yuan per ton per month on average, and the improved transportation efficiency is an average increase of 0.152 tons per kilometer per hour. The total transportation cost obtained by the WNV algorithm model in this paper is significantly reduced, and the transportation cost calculation effect using this model is better.
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