'Rarely Tried, and . . . Rarely Successful': Theoretically Impossible Price Predation among the Airlines
Cleveland-Marshall College of Law, Cleveland State University
March 24, 2009
Cleveland-Marshall Legal Studies Paper No. 09-172
Two large bodies of literature bearing on the competitive health of the deregulated airlines are in sharp conflict: (1) the volumes of judicial and academic output to the effect that the phenomenon of predatory pricing is, as a practical matter, impossible, and (2) the similarly massive body of industry-specific theory and empirical evidence that predation not only occurs in airline markets, but has been a key tool to preserve market power held by the surviving legacy carriers. This paper seeks to establish from the latter that the former is a poor basis for policy, especially if, as the paper argues, there is nothing really so special about airline markets as to make predation uniquely likely there. The paper therefore offers a basically casual but essential empiricism to the largely theoretical predation debate. The paper also takes the opportunity to reflect on the deeper philosophical role of generalization in antitrust.
Number of Pages in PDF File: 43
Keywords: predatory pricing, antitrust, monopolization, exclusionary conduct, airlines, deregulation
JEL Classification: D40, D42, K21, L40, L43, L90, L93
Date posted: March 26, 2009
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