The Marginal Price Effects of Antitrust Rules Against Price Discrimination

Abstract:     
The two central pricing rules contained in most antirust laws are prohibitions of below-cost pricing and prohibitions of discriminatory pricing. This article shows that the rule against discriminatory pricing may actually induce firms to charge exclusionary below-cost prices, even in the complete absence of any predatory intent on the part of firms.

Number of Pages in PDF File: 9

Keywords: price discrimination, personalized pricing, antitrust pricing rules, non-linear pricing

JEL Classification: K2, L1, L4

Accepted Paper Series