About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

32 Antitrust Bull. 1 (1987)

handle is hein.journals/antibull32 and id is 1 raw text is: The Antitrust Bulletin/Spring 1987 Predatory pricing: an economic and legal analysis BY CHARLES W. McCALL* I. Introduction The issue of predatory pricing has long been a subject of controversy within the legal and economics professions. Early debate centered on the question of the rationality of predatory pricing. This article briefly outlines the arguments in the rational- ity debate. Recent research has been devoted to the formulation of legal guidelines to be used in predatory pricing litigation. These proposals are critically reviewed in this study. The theoreti- cal underpinnings of price predation are then examined in the context of a cost-benefit model. This cost-benefit framework is used to derive a two-part predation standard. This standard is then applied to two antitrust cases. The article concludes with a discussion of the merits of utilizing this two-tiered standard in predatory pricing litigation. II. Overview of rationality debate Concern about the practice of predatory pricing can be traced back to the early 1900s. It was generally agreed that predatory pricing was a rational form of business conduct. In the pursuit of the objective of long-run profit maximization, some firms would allegedly use a policy of price predation to drive rivals out of business. The predator could then gain a dominant market share * Associate Professor of Economics, Rider College, Lawrenceville, New Jersey. 1987 by Federal Legal Publications, Inc.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most