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88 Yale L.J. 1641 (1978-1979)
Predatory Pricing: A Rejoinder

handle is hein.journals/ylr88 and id is 1657 raw text is: Predatory Pricing: A Rejoinder By Phillip Areedat and Donald F. Turnerl A further point-by-point reply to Professor Williamson would un- duly tax the readers of the Journal. The principal differences between us are adequately set forth in the several articles,1 and we leave the dispute where it sits. It does seem worthwhile, however, to comment on two points. The first concerns Williamson's general characterization of our ap- proach. Although we appreciate his kind words about our original contribution, we do not understand the repeated criticisms that we ignore a would-be predator's strategic motivations and that we rest solely on static economic analysis. Such characterizations do not fairly express our views about the formulation of wise and administrable legal rules. Our original article2 expressly addressed pricing arising out of a monopolist's desire to exclude entry. We discussed at considerable length the problem of pricing that excludes potentially efficient rivals without giving the public the benefits of long-run competitive pricing. The long-run welfare implications of such pricing concerned us in the original article and still do. The question we posed there and continue to ask is whether such considerations can be incorporated into sensible legal rules that would do more good than harm. Williamson agrees that forcing a monopolist to maintain preexisting prices would be undesirable. His proposal3 to limit expansion of the monopolist's output is an intriguing and more plausible approach. But it suffers from the difficulties analyzed in our last article,4 which also t- Professor of Law, Harvard University. + Bussey Professor of Law, Harvard University. 1. Areeda & Turner, Predatory Pricing and Related Practices under Section 2 of the Sherman Act, 88 HARV. L. Rav. 697 (1975); Williamson, Predatory Pricing: A Strategic and Welfare Analysis, 87 YALE L.J. 284 (1977); Areeda & Turner, Williamson on Predatory Pricing, 87 YALE L.J. 1337 (1978); Williamson, A Preliminary Response, 87 YALE L.J. 1353 (1978); Williamson, Williamson on Predatory Pricing 1i, 88 YALE L.J. 1183 (1979). 2. Areeda & Turner, Predatory Pricing and Related Practices under Section 2 of the Sherman Act, 88 HARV. L. Rsv. 697 (1975). 3. See Williamson, Predatory Pricing: A Strategic and Welfare Analysis, 87 YALE L.J. 284, 295-99, 331-37 (1977). 4. See Areeda & Turner, Williamson on Predatory Pricing, 87 YALE L.J. 1337, 1340-50 (1978) (output-restriction rule deficient on grounds of administrability and welfare prop- erties). 1641

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