Limit Pricing and Predation in the Antitrust Laws: Economic and Legal Aspects

Abstract

The overwhelming view in the economic literature is that limit pricing, the practice of establishing a non-profit-maximizing price with the intention of deterring entry of others into the market, either does not make economic sense or, in any event, does not have anticompetitive effects. This article will take a systematic look at the legal status of the limit price doctrine and propose its proper role.

Keywords: Limit Price Doctrine, Limit Pricing, Antitrust