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4 Antitrust L. & Econ. Rev. 105 (1970-1971)
The Myth of Predatory Pricing: An Empirical Study

handle is hein.journals/antlervi4 and id is 471 raw text is: THE MYTH OF PREDATORY PRICING:
The Popular Versus the Professional View of Predation
The predatory price-cutter is one of the oldest and most familiar
villains in our economic folklore. Defined as the financially-power-
ful competitor who monopolizes his industry by cutting prices
below cost and holding them there until his weaker rivals have gone
into bankruptcy, he is a significant figure in the public's perception
of economic affairs and undoubtedly exerts a very considerable in-
fluence on its attitude toward economic matters in the large, partic-
ularly its view of the government's proper role in economic policy.
Supporting the layman's view here, popular economic history is
filled with the price-cutter's exploits. The economic literature, on
the other hand, accords this ubiquitous character no such front-and-
center role on the economic stage. Indeed, the standard theoretical
analysis in this area treats predation as a form of non-maximizing
(irrational) behavior and thus as an unlikely occurrence in the
real world.' Given this wide disparity between the popular and the
* Dr. Koller is assistant professor of economics at Brigham Young
University, Provo, Utah. The instant paper is based on his doctoral disserta-
tion, Predatory Pricing in a Market Economy (University of Wisconsin, 1969).
' See, e.g., Morris A. Adelman, Geographical Price Differentials: An
Economic Commentary, 48 Illinois Bar Journal (March 1960), p. 514;
Robert C. Brooks, Jr., Price Cutting and Monopoly Power, 25 Journal of
Marketing (July 1961); Donald Dewey, Competitive Policy and National

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