Competition or Predation? Schumpeterian Rivalry in Network Markets
AbstractWe explore the logic of predation and rules designed to prevent it in markets subject to network effects. Although, as many have informally argued, predatory behavior is plausibly more likely to succeed in such markets, we find that it is particularly hard to intervene in network markets in ways that improve welfare. We find that imposition of the leading proposals for rules against predatory pricing may lower or raise consumer welfare, depending on conditions that may be difficult to identify in practice.
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Bibliographic InfoPaper provided by Competition Policy Center, Institute for Business and Economic Research, UC Berkeley in its series Competition Policy Center, Working Paper Series with number qt6hs0v0pc.
Date of creation: 01 Aug 2001
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predatory pricing; network markets;
Other versions of this item:
- Joseph Farrell and Michael L. Katz., 2001. "Competition or Predation? Schumpeterian Rivalry in Network Markets," Economics Working Papers E01-306, University of California at Berkeley.
- Farrell, Joseph & Katz, Michael, 2001. "Competition or Predation? Schumpeterian Rivalry in Network Markets," Department of Economics, Working Paper Series qt5xw2d98g, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Joseph Farrell & Michael Katz, 2002. "Competition or Predation? Schumpeterian Rivalry in Network Markets," Industrial Organization 0201003, EconWPA.
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- D4 - Microeconomics - - Market Structure and Pricing
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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