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Predatory pricing, Areeda-Turner test


Antitrust and Trade Regulation | Law and Economics


The revival of interest among economists in predatory pricing, spawned by Areeda and Turner's 1975 article, and the tidal wave of literature which has followed, creates a serious problem for the lawyer interested in keeping up with what economists are saying on the subject. Articles appearing in the standard economics journals are often inaccessible, due to the advanced level of mathematics normally employed, and seem of little apparent relevance, due to the detailed but often artificially sounding assumptions used to generate conclusions. The materials appearing in law reviews, while perhaps less technical, is voluminous and not always original, Worst of all, no clear consensus seems to emerge, making lawyers skeptical that any useful purpose is served by attempting to master the material.

The present article does not attempt a detailed survey of the literature. Such a survey would be extremely lengthy, given the current volume of literature, and would itself be fairly technical. Instead it tries to articulate the major economic and policy issues and to explain the apparent failure to achieve a consensus on the appropriate judicial stance toward predatory pricing.

Publication Citation

George A. Hay, "The Economics of Predatory Pricing", 51 Antitrust Law Journal (1982)