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Persistent link: https://www.econbiz.de/10002079676
Predatory pricing doctrine is currently a dead area of the law. To proceed beyond summary judgment, a plaintiff must prove the predation created a “dangerous probability” of supracompetitive pricing as the mechanism for recouping the losses “invested” in the predation. This requires...
Persistent link: https://www.econbiz.de/10014179000
From the perspective of competitors, competition may be modeled as a prisoner’s dilemma. Setting the monopoly price is cooperation, undercutting is defection. Jointly, competitors are better off if both are faithful to a cartel. Individually, profit is highest if only the competitor(s) is...
Persistent link: https://www.econbiz.de/10014186597
In this paper I set forth an antitrust remedy for the oligopolistic pricing problem. Oligopoly pricing resembles a repeated prisoners' dilemma game. Each firm has an incentive to moderately lower its price and thus increase its sales at its competitors' expense. However, each firm knows that its...
Persistent link: https://www.econbiz.de/10014049971
When small liberal arts colleges, particularly those in the Northeastern United States, abolish fraternities and sororities, they may be violating the antitrust laws. Additionally, by removing what may be the only viable competitor for room and board services for students in the small towns that...
Persistent link: https://www.econbiz.de/10014053493
A use-or-lose provision requires firms to employ a certain minimum fraction of their productive capacity. Variants have been used by regulators in the airline, natural gas transmission, and electric power industries, among others. The primary objective of these provisions is to limit capacity...
Persistent link: https://www.econbiz.de/10014198408
Multiemployer collective bargaining relationships between unions and employer associations easily devolve into legalized cartels. Once unions establish themselves as the bargaining representative for employers’ employees, the employers have much to gain from banding together as an association,...
Persistent link: https://www.econbiz.de/10014200477
We use experiments to analyze what type of communication is most effective in achieving cooperation in a simple collusion game. Consistent with the existing literature on communication and collusion, even minimal communication leads to a short run increase in collusion. However, in a limited...
Persistent link: https://www.econbiz.de/10014201287
We present a model with firms selling (homogeneous) products in two imperfectly segmented markets (a "high-demand" and a "low-demand" market). Buyers are mobile but restricted by transportation costs, so that imperfect arbitrage occurs when prices differ in both markets. We show that equilibria...
Persistent link: https://www.econbiz.de/10014202214
Hardly any antitrust lawyer would deny that antitrust needs solid foundations in economics. Antitrust authorities hire economists, if they do not even haven the position of a chief economist. Antitrust not only capitalises on economic theory, but it is equally sensitive to empirical studies, be...
Persistent link: https://www.econbiz.de/10014212572