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


  • Giocoli, Nicola


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.

Suggested Citation

  • Giocoli, Nicola, 2010. "Games judges don't play: predatory pricing and strategic reasoning in US antitrust," MPRA Paper 33810, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:33810

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    References listed on IDEAS

    1. Motta,Massimo, 2004. "Competition Policy," Cambridge Books, Cambridge University Press, number 9780521016919, May.
    2. Elzinga, Kenneth G, 1970. "Predatory Pricing: The Case of the Gunpowder Trust," Journal of Law and Economics, University of Chicago Press, vol. 13(1), pages 223-240, April.
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    7. A. Michael Spence, 1977. "Entry, Capacity, Investment and Oligopolistic Pricing," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 534-544, Autumn.
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    9. Wilson, Robert, 1992. "Strategic models of entry deterrence," Handbook of Game Theory with Economic Applications,in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 10, pages 305-329 Elsevier.
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    13. Peltzman, Sam, 1991. "The Handbook of Industrial Organization: Review Article," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 201-217, February.
    14. Giocoli, Nicola, 2005. "Mathematics as the role model for neoclassical economics (Blanqui Lecture)," MPRA Paper 33806, University Library of Munich, Germany.
    15. Richard Arena & Sheila Dow & Matthias Klaes, 2009. "Open Economics: Economics in relation to other disciplines," Post-Print halshs-00727206, HAL.
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    Cited by:

    1. Aldo Montesano, 2012. "Price collusion with free entry: the parasitic competition," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 59(1), pages 41-65, March.
    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. Nicola Giocoli, 2015. "Old lady charm: explaining the persistent appeal of Chicago antitrust," Journal of Economic Methodology, Taylor & Francis Journals, vol. 22(1), pages 96-122, March.

    More about this item


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

    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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