Tuesday, August 28, 2012
Posted by D. Daniel Sokol
Hans Zenger, Charles River Associates (CRA) explores The Marginal Price Effects of Antitrust Rules Against Price Discrimination.
ABSTRACT: The two central pricing rules contained in most antirust laws are prohibitions of below-cost pricing and prohibitions of discriminatory pricing. This article shows that the rule against discriminatory pricing may actually induce firms to charge exclusionary below-cost prices, even in the complete absence of any predatory intent on the part of firms.