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34 Antitrust Bull. 869 (1989)
Testing for Predation: Is Recoupment Feasible

handle is hein.journals/antibull34 and id is 883 raw text is: The Antitrust Bulletin/Winter 1989

Testing for predation:
is recoupment feasible?
I. Introduction
The basic idea behind predatory pricing is to discipline or elimi-
nate one's rivals in order to maintain or establish monopoly
power. This is done by undercutting rivals' prices and imposing
losses on them. Eventually rivals expire or surrender price leader-
ship to the predator. Inherent in the strategy is the predator
sustaining short-run loss in order to impose losses on its prey.
This is true whether the predator has a cost advantage or not,
  Professors of Economics, University of Virginia.
AUTHORS' NOTE: The authors would like to thank Eric M. Engen and
Jonathan S. Skinner for computational and programming assistance
and, for their comments on an earlier version, participants in the
Microeconomics Workshop at the University of Virginia, the Economic
& Legal Organization Workshop at the University of Chicago, the
Federal Trade Commission's Bureau of Economics Seminar, the Anti-
trust Division's Economic Analysis Group Seminar, the Center for the
Study of Market Processes colloquium at George Mason University, and
the Departments of Economics at the University of Florida and Trinity
University. We are grateful to the Earhart Foundation for partial
financial support.

D 1990 by Federal Legal Publications. Inc.

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