Abstract and Keywords
Predatory pricing occurs when a dominant firm adopts a strategy of charging prices below cost in order to drive rivals out of business—with the prospect of charging high prices in the future and recouping its losses. The economic conditions required for this strategy to be effective are constrained. Current antitrust case law, notably the Court’s Brooke Group decision, provides reasonable criteria for identifying genuine cases of predation.
Keywords: predatory pricing, antitrust, recoupment, game theory, Brooke Group Given the enormous stake that antitrust has in low prices, and our extraordinary difficulties assessing predation claims, the best course is to develop predation rules that are bot
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