edoc

Hunting Unicorns? Experimental Evidence on Predatory Pricing Policies

Edlin, Aaron and Roux, Catherine and Schmutzler, Armin and Thöni, Christian. (2017) Hunting Unicorns? Experimental Evidence on Predatory Pricing Policies. Working Paper Series, (DP12125).

Full text not available from this repository.

Official URL: http://edoc.unibas.ch/58555/

Downloads: Statistics Overview

Abstract

We study the anticompetitive effects of predatory pricing and the efficacy of three policy responses. in a series of experiments where an incumbent and a potential entrant interact, we compare prices, market structures and welfare. Under a laissez-faire regime, the threat of post-entry price cuts discourages entry, and allows incumbents to charge monopoly prices. Current U.S. policy (Brooke Group) does not help. A policy suggested by Baumol (1979) lowers post-exit prices, while Edlin’s (2002) proposal reduces pre-entry prices and encourages entry. While both policies show outcomes after entry that are less competitive than under Laissez-Faire, they nevertheless increase consumer welfare.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Industrial Organization and Regulation of Energy Markets (Roux)
UniBasel Contributors:Roux, Catherine
Item Type:Working Paper
Publisher:CEPR
ISSN:1664-7041
e-ISSN:1664-705X
Number of Pages:30
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
Related URLs:
Last Modified:15 Mar 2018 10:21
Deposited On:15 Mar 2018 10:21

Repository Staff Only: item control page