Games judges don't play: predatory pricing and strategic reasoning in US antitrust
AbstractThe 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 33810.
Date of creation: 2010
Date of revision:
Antitrust law; predatory pricing; Chicago School; Harvard; game theory;
Find related papers by JEL classification:
- B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
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