Economic Rationality and the Areeda–Turner Rule

Abstract

The Areeda-Turner rule in U.S. antitrust jurisprudence limits successful predatory pricing cases to circumstances where prices can be shown to have been set below marginal costs. While not cast so, the rule reflects the view that predatory pricing is rarely attempted; and even where attempted is rarely successful; and even where attempted and successful, is difficult to identify. In this paper, we examine the theoretical and empirical foundations of this rule, and conclude that it is time to demote the Areeda-Turner analysis from the status of a rule to that of a potentially useful form of inquiry in predatory pricing litigation, but one which is neither necessary nor dispositive.

Model for an Alert Under Getting Oee Into Old Shoes of Mc Pricing Mechanism

“…Given considerations to reducing profitmaking risk, the MC is the additional cost of producing one more unit of a product; the fixed cost is not included, and the variable cost is used as the foundation of pricing. Once the pricing is higher than the variable cost, businesses can obtain a marginal contribution and use it to compensate for the fixed cost (Gramlich and Ray, 2015); the strategy is under Areeda-Turner rule to avoid predatory pricing (Comanor and Frech III, 2015), that is to find the lowest estimate of products, enabling businesses to survive during periods when they are uncompetitive. In the manufacturing industry, the most crucial index offering timely reflective information during production is effectiveness.…”

Közgazdaságtan a jogalkalmazásban

“…a kutatók számára a fő kérdés nem az árak különböző költségtípusokhoz való viszonyának alakulása volt, hanem az, hogy a domináns piaci szereplő árazása hogyan hat a belépni szándékozókra és a versenyzői szegélyre. az empirikus elemzések alapján úgy vélték, hogy a szabály elsősorban az ügyek kezdeti, vizsgálati szakaszában használható, de abban sem szabad kötelező és a döntést befolyásoló jelleggel használni (Comanor-Frech [2015]). a kétoldalú piacoknál pedig esettanulmányokban mutatták ki, hogy alkalmazása félrevezető eredményt ad (Behringer-Filistrucchi [2015]).…”