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Games Judges Don't Play: Predatory Pricing and Strategic Reasoning in US Antitrust


Nicola Giocoli


University of Pisa

August 1, 2010

Supreme Court Economic Review, Forthcoming

Abstract:     
The paper analyzes the last three decades of debates on predatory pricing in US antitrust law, starting from the literature which followed Areeda & Turner 1975 and ending with the early years of the new century, after the Brooke decision. Special emphasis is given to the game-theoretic approach to predation and to the reasons why this approach has never gained attention in courtrooms. It is argued that, despite their mathematical rigor, the sophisticated stories told by strategic models in order to demonstrate the actual viability of predatory behavior fail to satisfy the criteria which guide the decisions of antitrust courts, in particular their preference for easy-to-apply rules. Therefore predation cases are still governed by a peculiar alliance between Chicago-style price theory - which, contrary to game theory, considers predatory behavior almost always irrational - and a Harvard-style attention for the operational side of antitrust enforcement.

Number of Pages in PDF File: 60

Keywords: predatory pricing, Chicago School, Harvard School, incomplete information, Supreme Court

JEL Classification: B21, K21, L41

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Date posted: September 14, 2010 ; Last revised: November 30, 2011

Suggested Citation

Giocoli, Nicola, Games Judges Don't Play: Predatory Pricing and Strategic Reasoning in US Antitrust (August 1, 2010). Supreme Court Economic Review, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1676095

Contact Information

Nicola Giocoli (Contact Author)
University of Pisa ( email )
Department of Law
PI
Italy
HOME PAGE: http://https://pisa.academia.edu/NicolaGiocoli
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