Are Public Enterprises the Only Credible Predators?

23 Pages Posted: 23 Jan 2002

See all articles by David E. M. Sappington

David E. M. Sappington

University of Florida - Department of Economics; National Bureau of Economic Research (NBER)

J. Gregory Sidak

Criterion Economics, L.L.C.

Abstract

In this review of John Lott's book, Are Predatory Commitments Credible?: Who Should the Courts Believe?, we find that Lott is more successful in pointing out the likelihood of predatory pricing by public enterprises than in proving that predatory pricing by private enterprises does not occur. In Part I of this Review, we critique Lott's theoretical and empirical attempts to show that predatory pricing by private firms is implausible. We review the theoretical arguments regarding the plausibility of predation by private firms, we critique Lott's empirical research on the credibility of predatory commitments by private firms, and finally we assess Lott's theoretical analysis of the effects of allowing would-be victims of predation to benefit directly from their privileged knowledge of a predator's intended activities. In Part II, we assess Lott's theoretical and empirical analyses of predatory pricing by public enterprises. In Part III, we present, as a proposed research agenda for scholars in law and economics, important unanswered questions that extend Lott's research on predatory pricing by public enterprises.

JEL Classification: D4,D41,K2,K21,K23,L32,L4,L43,L44,L5,L51,L9

Suggested Citation

Sappington, David E. M. and Sidak, J. Gregory, Are Public Enterprises the Only Credible Predators?. University of Chicago Law Review, Vol. 67, No. 1, pp. 271-292, Winter 2000. Available at SSRN: https://ssrn.com/abstract=296112

David E. M. Sappington

University of Florida - Department of Economics ( email )

224 Matherly Hall
Gainesville, FL 32611-7140
United States
352-392-3904 (Phone)
352-336-1420 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

J. Gregory Sidak (Contact Author)

Criterion Economics, L.L.C. ( email )

1717 K Street, N.W.
Washington, DC 20006
United States
(202) 518-5121 (Phone)

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

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