Predatory conduct: optimal deterrence and false positive errors (Jel: L40, L41, K41)

Micol Manenti

Mercato Concorrenza Regole, 2012, issue 3, 431-462

Abstract: The paper moves from the awareness of the close proximity between the phenomenaof procompetitive price cutting and the predatory ones. Within this context, theaim of present work is to propose a reflection about the difficulties connected witha thorough investigation of the judicial unilateral exclusionary practices that occurthrough the alteration of the price parameter of purchase or sale of an good. The needof competitive dynamics preservation against suboptimal deterrence risks (associatedwith too permissive legal standards) is compared with the necessity of not underestimatingthe consequences, in terms of social cost, related to false positives. Through theUs Weyerhaeuser case study, on a charge of predatory bidding, we will demonstratehow, in a court, the failure in the implementation of economics criteria for a finding ofunlawful conduct (allegedly anticompetitive) can bring to the protection of inefficientcompetitors. The examination of the documents, placed on the file of the process, isentirely new, has been translated into a series of original charts supporting the discussion.Their analysis demonstrated that every conviction has to presuppose not only apreventive assessment of the primary parameters of symptomatic predation but alsothe presence of objective justifications for the adoption of the examined behaviour.

Keywords: competition; predatory bidding; deterrence; wrongful conviction. (search for similar items in EconPapers)
Date: 2012
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