Predatory Pricing and Recoupment

Posted by Social Science Research Network

Predatory Pricing and Recoupment by Christopher R. Leslie (University of California, Irvine School of Law)

ABSTRACT: Predatory pricing is a two-step strategy for securing monopoly profits. During the first step–thepredation stage–a firm charges a price below its costs in the hope of driving its competitors out of the market by forcing them to sell at a loss as well. If it succeeds, the firm can proceed to the second step–the recoupment stage. After it has the market to itself, the now-dominant firm charges a monopoly price in an effort to recou

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