Hunting unicorns? Experimental evidence on predatory pricing policies

Arbeitspapier

We study the anticompetitive effects of predatory pricing and the efficacy of three policy responses. In a series of experiments where an incumbent and a potential entrant interact, we compare prices, market structures and welfare. Under a laissez-faire regime, the threat of post-entry price cuts discourages entry, and allows incumbents to charge monopoly prices. Current U.S. policy (Brooke Group) does not help. A policy suggested by Baumol (1979) lowers post-exit prices, while Edlin's (2002) proposal reduces pre-entry prices and encourages entry. While both policies show outcomes after entry that are less competitive than under Laissez-Faire, they nevertheless increase consumer welfare.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. 258

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Firm Behavior: Theory ; Antitrust Law ; Monopoly; Monopolization Strategies ; Oligopoly and Other Imperfect Markets ; Design of Experiments: Laboratory, Individual
• Thema: Predatory pricing ; entry deterrence ; firm strategy ; antitrust law ; experiment

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Edlin, Aaron S. ; Roux, Catherine ; Schmutzler, Armin ; Thöni, Christian
• Ereignis: Veröffentlichung
• (wer): University of Zurich, Department of Economics
• (wo): Zurich
• (wann): 2017

Weitere Informationen

• DOI: doi:10.5167/uzh-138188
• Handle: http://hdl.handle.net/10419/173418
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ