Excessive Prices

OECD Best Practice Roundtables in Competition Policy, October 2011

86 Pages Posted: 20 Oct 2011 Last revised: 10 Jan 2012

See all articles by Frank P. Maier-Rigaud

Frank P. Maier-Rigaud

ABC economics; IESEG School of Management (LEM-CNRS), Department of Economics and Quantitative Methods

Date Written: January 9, 2012

Abstract

One of the most controversial theories of harm in competition law in general and within the category of exploitative abuses in particular is excessive prices. While many arguments have been given against excessive price cases, there also exist many arguments in favour of such cases. Furthermore regulation and regulatory interventions with the aim of curbing excessive prices are prevalent not only in those jurisdictions that allow for excessive price cases in antitrust but also in those where competition law does not foresee excessive prices as an antitrust offense.

The reasons against excessive prices cases include inter alia the risk of undermining investment incentives both, of firms already in the market and potential entrants, the legal uncertainty that may be associated with the concept and also the risk of competition authorities overstepping their legitimacy in light of political pressures. Reasons in favour of excessive prices as an antitrust offence include inter alia limited potential for market self-correction due to permanently high entry barriers, the absence of a regulator or regulatory failure. One of the most prominent reasons in favour of excessive price cases in light of the consumer orientation of most competition laws is that excessive prices exert the most direct negative impact on consumers.

Keywords: Excessive Prices, Excessive Pricing, Antitrust, Competition Policy, Abuse of Dominance, Price Gouging

JEL Classification: L41, K21, K23, L51

Suggested Citation

Maier-Rigaud, Frank P., Excessive Prices (January 9, 2012). OECD Best Practice Roundtables in Competition Policy, October 2011, Available at SSRN: https://ssrn.com/abstract=1946779 or http://dx.doi.org/10.2139/ssrn.1946779

Frank P. Maier-Rigaud (Contact Author)

ABC economics ( email )

Berlin, 10115
Germany
10115 (Fax)

HOME PAGE: http://www.ABCecon.com

IESEG School of Management (LEM-CNRS), Department of Economics and Quantitative Methods ( email )

Socle de la Grande Arche
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Paris, La Défense Cedex, 92044
France

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