'Rarely Tried, and . . . Rarely Successful': Theoretically Impossible Price Predation among the Airlines

43 Pages Posted: 26 Mar 2009  

Chris Sagers

Cleveland-Marshall College of Law, Cleveland State University

Date Written: March 24, 2009

Abstract

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.

Keywords: predatory pricing, antitrust, monopolization, exclusionary conduct, airlines, deregulation

JEL Classification: D40, D42, K21, L40, L43, L90, L93

Suggested Citation

Sagers, Chris, 'Rarely Tried, and . . . Rarely Successful': Theoretically Impossible Price Predation among the Airlines (March 24, 2009). Cleveland-Marshall Legal Studies Paper No. 09-172. Available at SSRN: https://ssrn.com/abstract=1367874 or http://dx.doi.org/10.2139/ssrn.1367874

Chris Sagers (Contact Author)

Cleveland-Marshall College of Law, Cleveland State University ( email )

2121 Euclid Avenue, LB 138
Cleveland, OH 44115-2214
United States

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