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Excessive Pricing: Towards A Workable And Objective Rule

BY | August 14, 2017

By Eduardo Saavedra & Javier Tapia –  In this short note, we aim to advance towards the creation of a workable and objective rule for determining when a price should…

By Eduardo Saavedra & Javier Tapia – 

In this short note, we aim to advance towards the creation of a workable and objective rule for determining when a price should be deemed excessive – minimizing, at the same time, the risk of damaging innovation or research and development. We propose and formalize a test that combines different benchmarks to set a threshold. In a nutshell, if the price a super-dominant firm actually charges is below the threshold, there should be no review of t

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