IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Strategic Buyers and Market Entry

  • Lisa Bruttel
  • Jochen Glöckner

This paper tests two basic assumptions underlying court made or statutory provisions prohibiting predatory pricing. Such prohibitions are usually based on the economic grounds that monopolistic pricing is likely to occur in the long run, causing harm to competition and consumers. The first assumption under scrutiny is that customers will accept monopolistic prices during the subsequent phase of recoupment, even though they have become accustomed to low prices during the price war. The second assumption is that no competitor will (re-)enter the market in this subsequent phase. Our two experiments indicate that both assumptions are not backed up by actual decision making both of consumers and of competitors. Moreover, we find that consumers use their market power in order to maintain long-run competition.

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://www.twi-kreuzlingen.ch/uploads/tx_cal/media/TWI-RPS-044-Bruttel-Gloeckner-2009-07.pdf
Download Restriction: no

Paper provided by Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 44.

as
in new window

Length:
Date of creation: 2009
Date of revision:
Handle: RePEc:twi:respas:0044
Contact details of provider: Postal: Hauptstr. 90, CH-8280 Kreuzlingen 2
Phone: +41-71-677 05 10
Fax: +41-71-677 05 11
Web page: http://www.twi-kreuzlingen.ch/Email:


More information through EDIRC

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. Isaac, R Mark & Smith, Vernon L, 1985. "In Search of Predatory Pricing," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 320-45, April.
  2. Rosario Gomez & Jacob K. Goeree & Charles A. Holt, 1999. "Predatory Pricing: Rare Like a Unicorn?," Virginia Economics Online Papers 339, University of Virginia, Department of Economics.
  3. Armin Falk & Urs Fischbacher, 2001. "A Theory of Reciprocity," CESifo Working Paper Series 457, CESifo Group Munich.
  4. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  5. Capra, C. Monica & Goeree, Jacob K. & Gomez, Rosario & Holt, Charles A., 2000. "Predation, asymmetric information and strategic behavior in the classroom: an experimental approach to the teaching of industrial organization," International Journal of Industrial Organization, Elsevier, vol. 18(1), pages 205-225, January.
  6. Milgrom, Paul & Roberts, John, 1982. "Predation, reputation, and entry deterrence," Journal of Economic Theory, Elsevier, vol. 27(2), pages 280-312, August.
  7. Ernst Fehr & Urs Fischbacher, 2004. "Third-party punishment and social norms," Experimental 0409002, EconWPA.
  8. Harrison, Glenn W., 1988. "Predatory pricing in a multiple market experiment : A note," Journal of Economic Behavior & Organization, Elsevier, vol. 9(4), pages 405-417, June.
  9. Huck, Steffen & Normann, Hans-Theo & Oechssler, Jorg, 2004. "Two are few and four are many: number effects in experimental oligopolies," Journal of Economic Behavior & Organization, Elsevier, vol. 53(4), pages 435-446, April.
Full references (including those not matched with items on IDEAS)

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

When requesting a correction, please mention this item's handle: RePEc:twi:respas:0044. 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: (Ulrich Wacker)

The email address of this maintainer does not seem to be valid anymore. Please ask Ulrich Wacker to update the entry or send us the correct address

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.