Chapter 9 Predation, monopolization, and antitrust

This chapter discusses a wide range of strategies that can be employed by incumbent firms either to protect or to extend their market shares against competitive attacks by actual and potential entrants. The hallmark of these strategies is that, invariably, they reduce the expected level of profits that incumbent's rivalspresent and futurecan hope to earn. As such, they differ from those types of conduct whose aim is to implement and enforce collusive arrangements among market participants. Unlike many collusive strategies, these hostile and exclusionary strategies that include low prices, output expansions, introductions of new products, redesigns of the existing products, and promotions are difficult to distinguish from area part and parcel of market rivalry that economists find salutary for economic welfare, that policy-makers wish to promote, and that business leaders often deplore.