Sep 01, 2005
A firm may reduce its prices in an attempt to destroy its rivals or to deter new entry. Although the Sherman Act has long been construed to prohibit this practice, the case law on predatory pricing has been characterized by vagueness and a paucity of economic analysis. In this Article, Professors Areeda and Turner analyze the predatory pricing offense in terms of its economic underpinnings. After briefly reviewing the fundamental economic concepts of cost-measurement and profit-maximization, the authors examine the relationship between a firms prices and its costs in order to define a rational dividing line between legitimately competitive prices and prices that are properly regarded as predatory. They then apply their analytical framework to possible techniques of predation other than general price reductions.
Links to Full Content
Featured News
Google and South Carolina Clash Over State Records Demand
May 8, 2024 by
CPI
Telefonica Germany Teams Up with Amazon Web Services to Migrate 5G Customers
May 8, 2024 by
CPI
Federal Judge Grants $7.4 Million Settlement in Pork Price-Fixing Case
May 8, 2024 by
CPI
Wilson Sonsini Bolsters Antitrust and Competition Practice with Key Partner Returns
May 8, 2024 by
CPI
EU to Scrutinize Telecom Italia’s Network Sale to KKR
May 8, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI