The Paradox of Predatory Pricing

Abstract:     
This article contributes to the body of scholarship on the strategic misuse of antitrust law by examining the ways in which firms can use predatory pricing law to chill price competition by more efficient rivals or organize tacit collusion schemes. It also considers the tendency of the remedial structure of U.S. predatory pricing law to chill price competition even in the absence of strategic misuse. In addition to making theoretical claims about the chilling effects of predatory pricing law, the article reports the results of two surveys, one concerning the compensation structure of plaintiffs' attorneys in predatory pricing cases and one concerning predatory pricing counseling by in-house lawyers and the effects of predatory pricing law on firms' pricing decisions.

Keywords: antitrust, price fixing, predatory pricing

Accepted Paper Series