Greg Mankiw speculates about predatory pricing and antitrust policy.
Has there ever been an actual example where predatory pricing has been used to clear out the competition and then take over the market? It seems to me that there is too much information asymmetry to actually pull this off. In addition, monopolies are either efficient and price low (so who cares) or other players come into markets. So its never actually a problem, just a theoretical hyperbole that economists like to muse about and politicians like to drum up scare about to increase their own influences.
The so-called predatory price cuts have not spilled over to the sale of textbooks. Is that good news for students (as the Booksellers’ argument suggests) or bad news?
Of course its bad news to the corporations.. So-called “predatory pricing” keeps prices low. So price wars only hurt the profits of the big publishers. Everyone else wins. Any bets on when they’ll start calling for price controls? you know… to “correct” for the market?