Advanced Search
MyIDEAS: Login to save this paper or follow this series

Games judges don't play: predatory pricing and strategic reasoning in US antitrust

Contents:

Author Info

  • Giocoli, Nicola

Abstract

The paper analyzes the last three decades of debates on predatory pricing in US antitrust law, starting from the literature which followed Areeda & Turner 1975 and ending with the early years of the new century, after the Brooke decision. Special emphasis is given to the game-theoretic approach to predation and to the reasons why this approach has never gained attention in courtrooms. It is argued that, despite their mathematical rigor, the sophisticated stories told by strategic models in order to demonstrate the actual viability of predatory behavior fail to satisfy the criteria which guide the decisions of antitrust courts, in particular their preference for easy-to-apply rules. Therefore predation cases are still governed by a peculiar alliance between Chicago-style price theory – which, contrary to game theory, considers predatory behavior almost always irrational – and a Harvard-style attention for the operational side of antitrust enforcement.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/33810/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 33810.

as in new window
Length:
Date of creation: 2010
Date of revision:
Handle: RePEc:pra:mprapa:33810

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: Antitrust law; predatory pricing; Chicago School; Harvard; game theory;

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. A. Michael Spence, 1977. "Entry, Capacity, Investment and Oligopolistic Pricing," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 8(2), pages 534-544, Autumn.
  2. William E. Kovacic & Carl Shapiro, 2003. "Antitrust Policy: A Century of Economic and Legal Thinking," Law and Economics, EconWPA 0303006, EconWPA.
  3. Cabral, Luis M B & Riordan, Michael H, 1997. "The Learning Curve, Predation, Antitrust, and Welfare," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 45(2), pages 155-69, June.
  4. Yamey, B S, 1972. "Predatory Price Cutting: Notes and Comments," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 15(1), pages 129-42, April.
  5. Wilson, Robert, 1992. "Strategic models of entry deterrence," Handbook of Game Theory with Economic Applications, Elsevier, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 10, pages 305-329 Elsevier.
  6. Franklin M. Fisher, 1989. "Games Economists Play: A Noncooperative View," RAND Journal of Economics, The RAND Corporation, vol. 20(1), pages 113-124, Spring.
  7. Bolton, P. & Brodley, J.F. & Riordan, M.H., 1999. "Predatory Pricing: Strategic Theory and Legal Policy," Discussion Paper, Tilburg University, Center for Economic Research 1999-82, Tilburg University, Center for Economic Research.
  8. Peltzman, Sam, 1991. "The Handbook of Industrial Organization: Review Article," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(1), pages 201-17, February.
  9. Milgrom, Paul & Roberts, John, 1982. "Predation, reputation, and entry deterrence," Journal of Economic Theory, Elsevier, Elsevier, vol. 27(2), pages 280-312, August.
  10. Giocoli, Nicola, 2005. "Mathematics as the role model for neoclassical economics (Blanqui Lecture)," MPRA Paper 33806, University Library of Munich, Germany.
  11. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, Elsevier, vol. 27(2), pages 253-279, August.
  12. Motta,Massimo, 2004. "Competition Policy," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521016919.
  13. Easley, David & Masson, Robert T & Reynolds, Robert J, 1985. "Preying for Time," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 33(4), pages 445-60, June.
  14. Demsetz, Harold, 1992. "How Many Cheers for Antitrust's 100 Years?," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 30(2), pages 207-17, April.
  15. Elzinga, Kenneth G, 1970. "Predatory Pricing: The Case of the Gunpowder Trust," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 13(1), pages 223-40, April.
  16. Milgrom, Paul & Roberts, John, 1987. "Informational Asymmetries, Strategic Behavior, and Industrial Organization," American Economic Review, American Economic Association, American Economic Association, vol. 77(2), pages 184-93, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Giocoli, Nicola, 2012. "Old lady charm: explaining the persistent appeal of Chicago antitrust," MPRA Paper 39244, University Library of Munich, Germany.
  2. Signorino, Rodolfo, 2012. "Old lady charm: a comment," MPRA Paper 39211, University Library of Munich, Germany.
  3. Salvadori, Neri & Signorino, Rodolfo, 2011. "Competition," MPRA Paper 38387, University Library of Munich, Germany.
  4. Aldo Montesano, 2012. "Price collusion with free entry: the parasitic competition," International Review of Economics, Springer, Springer, vol. 59(1), pages 41-65, March.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:33810. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.