Why I Don't Fear Predatory Pricing

by Don Boudreaux on July 12, 2007

in Antitrust

My recent posts (here and here) on antitrust matters brings this question, by e-mail, from someone named Rhonda: "How can you be sure that dominant firms like Whole Foods do not use their privileged position to underprice their weaker rivals.  It seems to me this tactic is used often."

Here’s an article that I wrote several years ago (with Jim Gattuso) explaining my reasons why I never worry that so-called "predatory pricing" will ever lead to consumer harm.  (The article is rather long; the germane part of it is the section entitled "The Economics of Predation.")


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