In this paper we provide game theoretic support for the results of the kinked demand curve. By analyzing an infinitely repeated game where unit costs fluctuate stochastically between a low and a high state over time and where firms follow a price-matching punishment strategy, we demonstrate that...

A dominant firm can abuse its position by charging unfair prices under EU competition law. Among other things, this prohibition has been used to prohibit excessive prices that are ‘too high'. This abuse has remained underdeveloped conceptually and in practice at the EU level, so there is...