Predatory Pricing

Pricing below cost is often classified as “dumping” in international trade and as “predatory pricing” in local markets. It is legally prohibited from practice because of earlier findings that it leads to predatory behavior by either eliminating competition or stealing market share. This study shows that a stochastic exchange rate can create incentives for a profit‐minded monopoly firm to set price below marginal cost. Our result departs from earlier findings because the optimal pricing decision is based on a rational behavior that does not exhibit any malicious intent against the competition to be considered as violating anti‐trust laws. The finding is a robust result, because our analysis demonstrates that this behavior occurs under various settings such as when the firm (i) is risk‐averse, (ii) can postpone prices until after exchange rates are realized, (iii) is capable of manufacturing in multiple countries, and (iv) operates under demand uncertainty in addition to the random ex...

We formally characterize predatory pricing in a modern industrydynamics framework that endogenizes competitive advantage and industry structure. As an illustrative example we focus on learningby-doing. To disentangle predatory pricing from mere competition for efficiency on a learning curve we decompose the equilibrium pricing condition. We show that forcing firms to ignore the predatory incentives in setting their prices can have a large impact and that this impact stems from eliminating equilibria with predationlike behavior. Along with the predation-like behavior, however, a fair amount of competition for the market is eliminated. (JEL D21, D43, D83, K21, L13, L41) Predatory pricing-a deliberate strategy of pricing aggressively in order to eliminate competitors-is one of the more contentious areas of antitrust policy. Scholars such as Edlin (2012) argue that predatory pricing can, under certain circumstances, be a profitable business strategy. Others-commonly associated with the Chicago School-suggest that predatory pricing is rarely rational and thus unlikely to be practiced or, as Baker (1994) puts it, somewhere between a white tiger and a unicorn-a rarity and a myth. At the core of predatory pricing is a trade-off between lower profit in the short run due to aggressive pricing and higher profit in the long run due to reduced competition. But as the debate over the efficacy-and even the existence-of predatory pricing suggests, it is not necessarily straightforward to translate this intuitive understanding into a more precise characterization of what predatory pricing actually is. 1

Why regulate natural monopolies? Conventional economic theory points to the price-marginal cost margin and the ensuing deadweight loss. But this hypothesis does a poor job of explaining the way that regulators behave in practice. This paper proposes an alternative hypothesis: that natural monopoly regulation exists to protect the sunk investments made by consumers of the regulated firm. This hypothesis explains many of the practices of regulators which make little or no sense under conventional economic theory, such as the desire to pursue stable prices, the aversion to forms of price discrimination such as Ramsey pricing, and the role of incremental cost as a pricing floor.

US antitrust policy contains twists, turns, and even circles. Most are familiar with famous antitrust cases from the early 1900s. However, US antitrust law stems from philosophical and economic theories of competition in Britain. Building from these roots, Nicola Giocoli describes an account of the development of antitrust law and the role (and lack thereof ) played by economic theory. In the process, he sheds light on the influential antitrust cases we know so well. Predatory pricing drives Giocoli's underlying theme of antitrust policy wrought with a goulash of contradictions, achievements, and setbacks. Antitrust policy is determined by all three branches of government, as well as federal regulators, academics, and even the firms affected by these laws. Giocoli reveals how each player shaped the path, for better or for worse. Along with the philosophical roots of competition, Giocoli provides a fascinating account of the economic theory behind anticompetitive behavior. His focus is the Chicago School. However, the reader will appreciate the outline of economic theories in Chapters 4 and 5 leading up to the pioneering work of Chicago's McGee [1958]. Then the post-McGee world is explored. Various Chicago viewpoints are compared, which surround the notable Areeda-Turner Rule ), as well as Bayesian game-theoretic models. Giocoli completes his history with a detailed exploration of the 1993 Brooke case on predatory pricing, where the Supreme Court required proof of below-cost pricing and recoupment of investment. Readers are provided a careful look at the difficulty of proving predation using economic analysis and current models. The philosophical roots of competition provide a rich foundation for Giocoli's account. What is the freedom to compete? Is it the freedom to contract, allowing full rights to property, or is it the freedom from market power/freedom to trade, where one's property rights are limited by everyone having the opportunity to trade? Finally, in the world of antitrust, one must consider whether differences between market power and economic power matter from a policy perspective. These perspectives help the reader understand contradictory decisions by courts and why legislation has been enacted. Giocoli recognizes how anticompetitive viewpoints have changed by considering the interpretation of competition in 19th century Britain (which shaped the US viewpoint). The Mogul and Nordenfelt rulings in Britain highlight the reigning perspective of freedom of contract (over freedom to trade), where actions taken by firms or combinations of firms to protect against a rival's entry was viewed as competitive behavior. This view held that monopolies would be cured through competition. Section 8 of Chapter 2 offers a precise summary of this rather different notion of competition. As the competitive environment changed during the industrial era, the view of competition also changed. During the latter half of the 1800s, scholars and regulators realized that lower prices could lead to "destructive competition," and price wars could result in enduring monopoly power. Attention turned to the welfare of the consumer, not considered under the freedom of contract perspective. Predatory pricing was recognized as

The radio-taxi market is a market where customers through internet facilities can book a taxi to reach their desirable destiny within a reasonable price charged by the aggregator. By using the internet platform, the aggregator enterprises have engaged several taxi owners and drivers and the enterprises are providing these e-taxi services to the consumers. The competition commission, dealt with information alleging anti-competitive-agreement and abuse of dominance when Meru Cabs, one of the radio-taxi service providers, filed information against Uber and OLA too. Commission was of the view that Uber did not do any unfair practice but competition appellate tribunal, the appellate body made an opposite view contrasting to commission. The paper tries to analyse the abuse of collective dominance created by OLA and Uber in the radio-taxi market in India. The paper also highlights the international scenario and laws related to collective dominance in the European market.

I the past, times of severe economic crisis regularly led to the weakening of competition policy. In retrospect, this reaction appears to have deepened the crises it was meant to alleviate, at least in the United States at the beginning of the New Deal. This precedent suggests that a backlash against competition policy would be a wrong answer to the current challenges, even though exceptional economic conditions call for flexibility and adaptations. This set of three articles addresses competition policy in times of crisis. Andrea Amelio and Georges Siotis describe the European Commission’s handling of competition cases in the current unusual circumstances. Antoine Winckler and François-Charles Laprévote focus on State aid, and Carlos Winograd tells the story of the long-lasting negative impact of the Argentinian crisis of 2000 on the nascent competition policy. H les crises économiques se sont souvent accompagnées de réactions hostiles à la concurrence, qui ont dans l’ensemble aggr...

The paper analyzes the last three decades of debates about predatory pricing in US antitrust law, starting from the literature that followed Areeda and Turner's 1975 landmark paper and ending in the beginning of this century, upon the Brooke 1993 decision. Special emphasis is given to the game-theoretic approach to predation and to the reasons why this approach has never gained attention in the courtroom. It is argued that, despite their mathematical rigor, the sophisticated stories told by strategic models to demonstrate the actual viability of predatory behavior fail to satisfy the criteria guiding court's decisions, in particular their preference for easy-to-apply rules. 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

The ease of business transactions offered by e-commerce services makes many companies compete with each other to offer attractive promos to consumers or the public so that they are interested in making transactions on their e-commerce services, one of the promos offered is by providing discounts or discounts in certain time or better known as flash sale. However, in practice, flash sales are often accompanied by very large discounts on a product, even reaching the price of Rp. 99, - (ninety nine rupiah). The price offered is very different from the market price that should be, this gives an indication of predatory pricing or selling at a loss carried out by e-commerce business actors. The problem that will be raised by the author is how the flash sale method is carried out by e-commerce business actors and how is predatory pricing law enforcement based on Law Number 5 of 1999 concerning Monopolistic Practices and Unfair Business Competition. The flash sale practice carried out by e-...

An ongoing debate in competition jurisprudence today is with respect to the enforcement of competition law in digital markets. Digital markets are newer markets in context of which traditional tools of competition law have to be understood and applied. Though the challenges of competition enforcement in digital markets are manifold, this paper focusses on the assessment of dominance and abuse in platform markets, particularly in light of the 2019 Supreme Court judgement in the Uber matter. The Supreme Court's opinion that loss-making pricing can be an indicator of dominance is inconsistent with the Competition Commission of India's (CCI) views, which had cautioned against this circular interpretation of dominance and put the issue to rest. The author submits that conflicting interpretations such as these erode the certainty of the law. Competition laws can be flexible but not uncertain or unpredictable. The author identifies areas of concern in digital platforms that are yet unresolved and need to be addressed urgently by guidelines/amendments before the law on this issue becomes incoherent.

The Directive Principles of State Policy as enshrined in Article 39 of the Constitution of India lay down, inter alia, that the State shall direct its policy towards securing that the operation of the economic system does not result in concentration of wealth, to the common detriment. However, a study of the Indian market, decades after the enactment of the Constitution, reveals that the same is prone to wealth concentration, due to failure of the competitive fabric of the market. One of the ways in which such market failure occurs is by abuse of market power by firms, due to anti-competitive practices such as predatory pricing. According to competition law, only a dominant firm can be guilty of predatory pricing. To assess dominance, it is necessary, at the outset, to determine the relevant market. However, market determination in case of emerging markets is complex because traditional definitions do not take into account the competition dynamics that characterize new markets. In India, predatory pricing allegations against online taxis like Uber have necessitated an urgent relook at existing competition law provisions, to assess whether the same are equipped to deal with the challenges posed in defining nontraditionalmarkets. An analysis of the Competition Commission of India [CCI]'s orders reflects confusion. In most cases relating to emerging markets, allegations of predatory pricing could not be sustained, as the demarcation of the relevant market by the CCI did not support a conclusion of dominance.In this paper, the author analyses certainCCI decisions relating to predatory pricing, by focusing on the challenges of market definition in nontraditional markets.

An ongoing debate in competition jurisprudence today is with respect to the enforcement of competition law in digital markets. Digital markets are newer markets in context of which traditional tools of competition law have to be understood and applied. Though the challenges of competition enforcement in digital markets are manifold, this paper focusses on the assessment of dominance and abuse in platform markets, particularly in light of the 2019 Supreme Court judgement in the Uber matter. The Supreme Court’s opinion that loss-making pricing can be an indicator of dominance is inconsistent with the Competition Commission of India’s (CCI) views, which had cautioned against this circular interpretation of dominance and put the issue to rest. The author submits that conflicting interpretations such as these erode the certainty of the law. Competition laws can be flexible but not uncertain or unpredictable. The author identifies areas of concern in digital platforms that are yet unresol...

We have benefited from extensive discussions with and feedback from Luc Peeperkorn. On specific points we have exchanged views with and are grateful to Carles Esteva Mosso, Kris Dekeyser, Andreas Heinemann and Fred Jenny. We also thank the editors of this journal for their helpful comments on the text. All errors and omissions are ours alone, and the opinions we express are strictly personal; they do not represent the views of DG Competition, the European Commission or any other institution, entity, person, etc. 1 Case C-209/10 Post Danmark A/S v Konkurrencerådet, judgment of the Court of Justice (Grand Chamber) of 27 March 2012, not yet reported. 2 Attempts to chart a new course for abuse of dominance law in Europe have occasionally been met with scepticism due to a perception (unlike in distribution policy or merger control) that reform efforts had strayed beyond the confines of a rigid jurisprudence. Given this perceived dissonance between older jurisprudence and evolving enforcement policy, the question of how the ECJ would receive the framework and principles described in the Commission's 'Guidance on enforcement priorities in applying Article 82 EC to exclusionary conduct' has drawn the attention of many, particularly since a positive reception would promote greater legal certainty. See, eg, Ariel Ezrachi, 'The Commission's Guidance on Article 82 EC and the Effects Based Approach-Legal and Practical Challenges' , in Ariel Ezrachi (ed.), Article 82 EC: Reflections on its Recent Evolution (Hart Publishing, 2009), ch. 3, 51-65, especially pp. 60-1 (also pointing to another potential dissonance, this one among national courts if some draw from the Guidance Paper and others do not); Giorgio Monti, 'Article 82 EC: What Future for the Effects-Based Approach?', (2010) 1 Journal of European Competition Law and Practice 2, 8. The risk of enduring uncertainty may be exacerbated in the area of Article 102 since the tendency to resolve abuse cases via commitment decisions leaves the ECJ with reduced scope to control the way the Commission handles its cases under that provision. See, eg, Claus

A ban on pricing below cost was implemented under the 1987 Groceries Order based on the premise that loss leading used in multi-product retail pricing distorts competition and exploits consumers in the short run, while driving a more concentrated structure and reducing welfare in the long run. Loss leading is examined for multi-product retailers selling in imperfectly competitive market niches with imperfect consumer information. We develop a theoretical argument in a simple two-stage framework that illustrates how loss leading on a subset of products is an equilibrium outcome of price competition that leaves overall welfare equal to that observed under laissez faire.

This article advances a theory of commodity bundling as an alternative to forward integration in household production. We argue, in particular, that a producer having market power over the sale of a final consumption good will sometimes find it profitable to bundle that good with one or more complements-and to sell the preassembled package to consumers at a lump-sum pricefor the same reason that a monopolist of an intermediate input profits from vertically integrating his supply chain. In both cases, substitution against a monopoly-priced input is avoided and competitively determined input-price ratios are restored downstream. Combining the theories of transfer pricing and household production also suggests that the not uncommon practice of "mixed bundling", whereby sellers offer the same final consumption good both bundled and unbundled, can be explained as a way of segmenting consumers into groups based on differences in their skills, tastes, and preferences for home production.

The liberalization processes, which started in the 90's in Europe, opened up a new area for competition policy and competition scrutiny and enforcement. Both ex-ante regulation and competition policy are responsible for the consumer friendly implementation and advancement of the legislation related to the liberalization of certain public utilities. Every industry that has incumbents faces the problem of granting access to the facilities owned by the "big ones". Competition policy targets best achievable market conditions which provide the customers with the lowest prices and the market with most efficient behavior. In the long term this is only attainable with colorful market scene, vibrant conditions to operate and more options for the final customers to choose form. This, however, can be turned down by anti-competitive behavior of the participants that intends to eliminate competitors from the market. One of the various ways to achieve this is to use pricing methodologies which may straightforwardly result in forcing dependent market players to leave the playing field. Is there a way to control dominant undertakings' pricing methodologies? Can Article 82 of the EC Treaty be generalized? How did the European Court of Justice and the Commission formulate the practice towards these type of behaviors?

Fer tržišni uslovi su preduslov postojanja razvijenog i slobodnog tržišta, te je predmet ovog rada zaštita konkurencije, odnosno zloupotreba dominantnog tržišnog položaja iz pravno-ekonomskog ugla. Poseban fokus je na razmatranju ciljeva zabrane zloupotrebe dominantnog položaja od strane preduzeća, definisanju relevnantnog tržišta kao ključnog elementa u procesu utvrđivanja povrede konkurencije i utvrđivanju dominantnog položaja. Posebno su obrazloženi primeri iz poslovne prakse u kojima su analizirane različite prakse zloupotrebe dominantnog položaja: odbijanje i prekid saradnje, predatorsko ponašanje, individualno i asortimansko vezivanje proizvoda, definisanje prekomernih cena, neadekvatna rabatna politika, nametanje ekskluzive i diskriminacija kupaca. Pored toga u radu su predstavljene i mere, koje stoje na raspolaganju Komisiji za zaštitu konkurencije, za otklanjanje povreda konkurencije.

Objectives:Tobacco company conduct has been a central concern in tobacco control. Nevertheless, the public health community has not taken full advantage of the large economics and marketing literature on market competition in the cigarette industry.Methods:We conducted an unstructured narrative review of the economics and marketing literature using an antitrust framework that considers: 1) market; definition, 2) market concentration; 3) entry barriers; and 4) firm conduct.Results:Since the 1960s, U.S. cigarette market concentration has increased primarily due to mergers and growth in the Marlboro brand. Entry barriers have included brand proliferation, slotting allowance contracts with retailers and government regulation. While cigarette sales have declined, established firms have used coordinated price increases, predatory pricing and price discrimination to sustain their market power and profits.Conclusions:Although the major cigarette firms have exercised market power to increase prices and profits, the market could be radically changing, with consumers more likely to use several different types of tobacco products rather than just smoking a single cigarette brand. Better understanding of the interaction between market structure and government regulation can help develop effective policies in this changing tobacco product market.

Consider a monopolist in one market that faces competition in a second market. Bundled loyalty discounts, in which customers receive a price break on the monopoly good in exchange for making all purchases from the monopolist, have ambiguous welfare effects. To analyze such discounts as predatory pricing is incorrect. In some settings, they act as tie-in sales. Existing tests for whether such discounts violate Section 2 of the Sherman Act do not track changes in consumer surplus or total surplus. We present a new test and use it in an illustrative example based on SmithKline that assumes the "tied" market is a homogeneous good. If the tied market is characterized by Hotelling competition, bundling by the monopolist causes the rival firm to reduce its price. In numerical examples, we find that this can deter entry or induce exit.

Engaging with the internet and digital technologies is more invasive than ever before and the platforms that make it so have weaponized the law to shield themselves from the consequences of their exploitative business models. Federal data privacy laws in the U.S. are woefully inadequate and no law currently regulates private sector data collection and commodification, a process that undermines transparency, privacy, autonomy, and democracy itself. But the information economy does not operate in a lawless space; rather, it is the product of legal innovations and political maneuvers on the part of platforms during the early development of the digital age. Data propertization as a tool for ensuring privacy protections, if enacted at the national level, would be a continuation of that harmful legacy. The information fiduciary model is a promising alternative and presents a real opportunity to not only protect user privacy, but to also restructure the information economy towards greater transparency and greater responsiveness to user interests. Since the advent of computers in the 1950s and the creation of the World Wide Web in 1989, the internet has grown exponentially in terms of its reach and ability to affect life outside the digital realm. About 4.66 billion people are active users of the internet worldwide-nearly

The price parity clauses (PPCs) that online b o oking platforms impose have come under antitrust scrutiny. Wang and Wright (2017) show how by preventing showrooming, a narrow PPC can reduce search costs and benefit consumers under betweenplatform competition. In response to having to give up its wide PPC to hotels, Booking.com emphasized its best price guarantee (BPG) to customers. We observe that a narrow PPC combined with a (low hassle costs) BPG leaves only Wang and Wright's Price Parity and Monopoly Equilibrium (PPME), in which consumers are worse off than with no platform operating at all. A more-efficient (incumbent) platform can deter entry with the BPG, while the narrow PPC eliminates competition from direct sales channels. An equally-efficient platform could enter and compete consumer prices down because of the existence of hassle costs, yet this equilibrium is fragile to network effects. If sellers have incentives not to price differentiate between platform(s) and their direct sales channel, a narrow PPC alone suffices to sustain the PPME in both cases. The detrimental pricing contract combination that we point out calls for different platform competition policy.

In the convoluted landscape of market dynamics, the enigma of predatory pricing practices casts its shadow on fair competition and consumer welfare. This legal research book explores predatory pathways and their remedies. As our journey unfolds, we traverse the realms of competition laws, consumer protection, corruption, and international collaboration, weaving together a narrative that underscores the urgent need for reforms.
Chapter by chapter, this monograph deciphers the cryptic language of predatory pricing. Through legal provisions, international case references, and statistical evidence, we dissect the interplay of power dynamics that enable market actors to manipulate prices and exploit vulnerabilities. The tapestry of findings reveals the symbiotic dance of syndicates and corruption, distorting the market's symphony and stifling economic growth.
Amidst the shadows, this monograph illuminates a path forward. It explores fortifying enforcement mechanisms, embracing amendments that adapt to evolving tactics, enhancing consumer protection armor, encouraging reporting means through the anthem of whistleblowers, nurturing awareness for compliance, and forging international collaborations beyond borders. Like brush strokes, these chapters contribute to a masterpiece of knowledge that enriches the scholarly canvas.
As we bid farewell to this odyssey, we reflect on the legacy woven by threads of understanding. Challenges are met with resolve, catalyzing reforms that safeguard the interests of the middle class and lower class, the backbone of economic prosperity. The horizon urges us to navigate with determination and wisdom gained from our journey against predatory pricing practices. This monograph, a testament to meticulous analysis and scholarly endeavor, is a beacon of knowledge in pursuing market integrity, fairness, and economic resilience.

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.

The Areeda-Turner rule in U.S. antitrust jurisprudence limits successful predatory pricing cases to circumstances where prices can be shown to have been set below marginal costs. While not cast so, the rule reflects the view that predatory pricing is rarely attempted; and even where attempted is rarely successful; and even where attempted and successful, is difficult to identify. In this paper, we examine the theoretical and empirical foundations of this rule, and conclude that it is time to demote the Areeda-Turner analysis from the status of a rule to that of a potentially useful form of inquiry in predatory pricing litigation, but one which is neither necessary nor dispositive.

The Areeda-Turner rule in U.S. antitrust jurisprudence limits successful predatory pricing cases to circumstances where prices can be shown to have been set below marginal costs. While not cast so, the rule reflects the view that predatory pricing is rarely attempted; and even where attempted is rarely successful; and even where attempted and successful, is difficult to identify. In this paper, we examine the theoretical and empirical foundations of this rule, and conclude that it is time to demote the Areeda-Turner analysis from the status of a rule to that of a potentially useful form of inquiry in predatory pricing litigation, but one which is neither necessary nor dispositive.

Рад је на стао као ре зул тат ис тра жи ва ња у 2018. го ди ни у окви ру про јек та "Прав на тради ци ја и но ви прав ни иза зо ви" чи ји је но си лац Прав ни фа кул тет Уни вер зи те та у Но вом Са ду. Keywords: do mi nant po si tion, abu se of do mi nant po si tion, pre da tory pri ces, costs. Да тум при је ма ра да: 09.11.2018.

US antitrust policy contains twists, turns, and even circles. Most are familiar with famous antitrust cases from the early 1900s. However, US antitrust law stems from philosophical and economic theories of competition in Britain. Building from these roots, Nicola Giocoli describes an account of the development of antitrust law and the role (and lack thereof) played by economic theory. In the process, he sheds light on the influential antitrust cases we know so well. Predatory pricing drives Giocoli's underlying theme of antitrust policy wrought with a goulash of contradictions, achievements, and setbacks. Antitrust policy is determined by all three branches of government, as well as federal regulators, academics, and even the firms affected by these laws. Giocoli reveals how each player shaped the path, for better or for worse. Along with the philosophical roots of competition, Giocoli provides a fascinating account of the economic theory behind anticompetitive behavior. His focus is the Chicago School. However, the reader will appreciate the outline of economic theories in Chapters 4 and 5 leading up to the pioneering work of Chicago's McGee [1958]. Then the post-McGee world is explored. Various Chicago viewpoints are compared, which surround the notable Areeda-Turner Rule (Areeda and Turner [1975]), as well as Bayesian game-theoretic models. Giocoli completes his history with a detailed exploration of the 1993 Brooke case on predatory pricing, where the Supreme Court required proof of below-cost pricing and recoupment of investment. Readers are provided a careful look at the difficulty of proving predation using economic analysis and current models. The philosophical roots of competition provide a rich foundation for Giocoli's account. What is the freedom to compete? Is it the freedom to contract, allowing full rights to property, or is it the freedom from market power/freedom to trade, where one's property rights are limited by everyone having the opportunity to trade? Finally, in the world of antitrust, one must consider whether differences between market power and economic power matter from a policy perspective. These perspectives help the reader understand contradictory decisions by courts and why legislation has been enacted. Giocoli recognizes how anticompetitive viewpoints have changed by considering the interpretation of competition in 19th century Britain (which shaped the US viewpoint). The Mogul and Nordenfelt rulings in Britain highlight the reigning perspective of freedom of contract (over freedom to trade), where actions taken by firms or combinations of firms to protect against a rival's entry was viewed as competitive behavior. This view held that monopolies would be cured through competition. Section 8 of Chapter 2 offers a precise summary of this rather different notion of competition. As the competitive environment changed during the industrial era, the view of competition also changed. During the latter half of the 1800s, scholars and regulators realized that lower prices could lead to "destructive competition," and price wars could result in enduring monopoly power. Attention turned to the welfare of the consumer, not considered under the freedom of contract perspective. Predatory pricing was recognized as

University of Michigan. I would like to thank the Dean of the Haworth College of Business for a mini-grant to support this research and the staff at the Waldo library Resource Sharing Center for their assistance. I would also like to thank Howard P. Knopf and Henry C. Su for their insights into Canadian competition law and legal research which undoubtedly reduced the number and severity of errors made in this article.

Virginia for useful comments. The views contained herein are the authors' and do not necessarily reflect the views of the U.S. Department of Justice. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Indonesia is a legal country which requires a shield to protect the country. One of them is the national defense system which includes the armed forces or commonly referred to as the military. A member of the military must have a firm, disciplined and obedient attitude to the laws and regulations also the orders from superiors. If a member of the military commits an offense whether it is a violation of military disciplinary law or national law, it must be followed up with the sanctions imposed by ANKUM to punish. ANKUM have the authority to provide disciplinary action and punishment of military discipline to offenders. The authority is divided through the levels available in Act No.25 of 2014. The tiered distribution of authority of ANKUM including ANKUM has full, limited and very limited authority. From the division of authority, it doesn’t have much influence on the process of implementation, because each ANKUM in his unit has the authority to impose military discipline on members...

Predatory Pricing and Bundled Rebates: The Ramifications of LePage's Inc. v. 3M1 for Consumers Roberto Ramirez Introduction Imagine two firms competing in the transparent tape market. Firm A is the dominant firm, with a ninety-percent market share. Firm A also manufactures a ...

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This article analyses the competition law related to abuse of a dominant market position using strategy of predatory pricing by undertakings in the European Union and, compares the same situation to the United States’ predatory pricing law. The purpose of this article is to survey predatory pricing as a phenomenon both within and outside the EU. Article is largely centered on the case of Valio, which is still awaiting final judgment from the Supreme Administrative Court of Finland. This case was chosen as it is extremely topical and has several unique features. The findings proved that undertakings who achieved their dominant position before the recession have significant advantage over smaller undertakings. However, they cannot necessarily afford to act on the same basis for long, which is why a model closer to that of the United States would be of benefit to control some behaviors of these undertakings. Bearing in mind that the Valio case is examined under EU law, it will be inter...

Indonesia is a legal country which requires a shield to protect the country. One of them is the national defense system which includes the armed forces or commonly referred to as the military. A member of the military must have a firm, disciplined and obedient attitude to the laws and regulations also the orders from superiors. If a member of the military commits an offense whether it is a violation of military disciplinary law or national law, it must be followed up with the sanctions imposed by ANKUM to punish. ANKUM have the authority to provide disciplinary action and punishment of military discipline to offenders. The authority is divided through the levels available in Act No.25 of 2014. The tiered distribution of authority of ANKUM including ANKUM has full, limited and very limited authority. From the division of authority, it doesn’t have much influence on the process of implementation, because each ANKUM in his unit has the authority to impose military discipline on members...

To detect the presence of predatory pricing, antitrust authorities routinely ask whether a firm sacrifices current profit in exchange for the expectation of higher future profit following the exit of its rival. Because predatory pricing is an inherently dynamic phenomenon, we show in this paper how to construct sacrifice tests for predatory pricing in a modern industry-dynamics framework along the lines of Ericson & Pakes (1995). In particular, we adapt the definitions of predation due to Ordover & Willig (1981) and Cabral & Riordan (1997) to this setting and construct the corresponding sacrifice tests. * Most computations have been done on the Wharton School Grid and we are indebted to Hugh MacMullan for technical support.

Regulators express growing concern over "predatory lending," which we take to mean lending that extracts excessive rent from borrowers. We present a rational model of consumer credit in which such lending is possible, and we identify the circumstances in which it arises with and without competition. Predatory lending is associated with highly collateralized loans, inefficient rolling over of subprime loans, lending with disregard to ability to pay, prepayment penalties, balloon payments and poorly informed borrowers. Under most circumstances competition among lenders eliminates predatory lending. We use our model to analyze the effects of prominent legislative interventions.

Despite the discovery of predatory intent in several widely cited antitrust cases, many industrial organization economists have argued that predatory pricing is irrational and rarely observed. For example, one of our colleagues, Kenneth Elzinga, in an address to the American Bar Association posed the question of whether predatory pricing is rare like an old stamp or "rare like a unicorn." The argument is that pricing below cost in order to drive competitors out of the market will be irrational for two reasons: 1) there are more profitable ways (e.g., acquisitions) to eliminate competitors, and 2) future price increases will result in new entry. Decisions in antitrust cases have often resulted from documented predatory intent, which is sometimes attributed to an "irrational" motive for management to eliminate rivals. In the absence of a "smoking gun," arguments turn on Areeda-Turner cost-based tests, which are difficult to apply given the multi-product nature of most business operations. For these reasons, the issue of predatory pricing is a natural topic for laboratory studies where costs are induced directly. II. SINGLE MARKET DESIGNS The first experiment designed to investigate the possibility of predation is reported by Isaac and Smith (1985). They conducted a series of posted offer markets with a large seller that has a cost advantage over a small seller. Besides having a larger cash endowment to cover initial losses, the incumbent was given a higher capacity and lower costs, as shown in Figure 1. In order to construct the market supply function, consider the average costs for the two sellers, shown on the left side of the figure, in red for the large seller and in green for the small seller. Since the large seller's minimum average cost is at $2.50, no units would be supplied at lower prices, and the (thick) market supply

The big antitrust case has earned the reputation of being unmanageable and untriable, a guzzler of scarce enforcement resources, a demoralizer of trial lawyers and litigating parties, and a blight on the credibility of the litigation process. 1 The need to address the causes of attenuation of the complex antitrust case, and related concerns, 2 led the President of the United States to issue ExecutiVe Order 12022 establishing the National Commission for the Review of Antitrust Laws and Procedures 3 (National Commission or Commission). In essence, the President asked the Commission: What has gone wrong with the big antitrust case, and what should be done to correct the failings? What procedural and substantive revisions are necessary or appropriate to avoid runaway antitrust litigation and to deal more effectively

This Article examines the contention that the antitrust laws should be applied solely to promote efficiency and examines the often unarticulated definitions of efficiency. It addresses two questions:(1) How should efficiency, as it informs antitrust, be defined? and ...