全球智库信息集成服务系统(G2TT): DP8708 The economics of predation: What drives pricing when there is learning-by-doing?

G2TT

来源类型	Discussion paper
规范类型	论文
来源ID	DP8708
	DP8708 The economics of predation: What drives pricing when there is learning-by-doing?
	David Besanko; Ulrich Doraszelski; Yaroslav Kryukov
发表日期	2011-12-01
出版年	2011
语种	英语
摘要	Predatory pricing--a deliberate strategy of pricing aggressively in order to eliminate competitors--is one of the more contentious areas of antitrust policy and its existence and efficacy are widely debated. The purpose of this paper is to formally characterize predatory pricing in a modern industry dynamics framework. We endogenize competitive advantage and industry structure through learning-by-doing. We first show that predation-like behavior arises routinely in our model. Equilibria involving predation-like behavior typically coexist with equilibria involving much less aggressive pricing. To disentangle predatory pricing from mere competition for efficiency on a learning curve we next decompose the equilibrium pricing condition. Our decomposition provides us with a coherent and flexible way to develop alternative characterizations of a firm?s predatory pricing incentives, some of which are motivated by the existing literature while others are novel. We finally measure the impact of the predatory pricing incentives on industry structure, conduct, and performance. We show that forcing a firm to ignore these incentives in setting its price can have a large impact and that this impact stems from eliminating equilibria with predation-like behavior. Along with the predation-like behavior, however, a fair amount of competition for the market is eliminated. Overall, the distinction between predatory pricing and pricing aggressively to pursue efficiency is closely related to the distinction between the advantage-building and advantage-denying motives that our decomposition of the equilibrium pricing condition isolates and measures.
主题	Industrial Organization
关键词	Predatory pricing Competition policy Industry dynamics
URL	https://cepr.org/publications/dp8708
来源智库	Centre for Economic Policy Research (United Kingdom)
资源类型	智库出版物
条目标识符	http://119.78.100.153/handle/2XGU8XDN/537543
推荐引用方式 GB/T 7714	David Besanko,Ulrich Doraszelski,Yaroslav Kryukov. DP8708 The economics of predation: What drives pricing when there is learning-by-doing?. 2011.