Are Excessive Prices Really Self-Correcting?

@article{Ezrachi2008AreEP,
  title={Are Excessive Prices Really Self-Correcting?},
  author={Ariel Ezrachi and David Gilo},
  journal={Political Behavior: Cognition},
  year={2008}
}
  • Ariel Ezrachi, David Gilo
  • Published 2008
  • Economics
  • Political Behavior: Cognition
  • Excessive pricing by a dominant firm is considered as one of the most blatant forms of abuse. Despite this, competition authorities frequently refrain from intervening against excessive prices. The non-interventionist approach is based, among others, on the premise that high prices encourage new entry and thereby should be feared less. According to this view, in many cases, excessive prices are likely to be competed away and make intervention redundant. This paper questions this conventional… CONTINUE READING
    44 Citations

    References

    SHOWING 1-2 OF 2 REFERENCES
    Aaron Edlin proposed to ban severe post-entry price-cuts as predatory pricing, and he points out that one of the benefits of such a ban is that there will be more entry
    • the US
    above)