A Signaling Model of Predatory Pricing

John Roberts

Oxford Economic Papers, 1986, vol. 38, issue 0, 75-93

Abstract: Predatory pricing involves pricing lower in the presence of competition than would otherwise be o ptimal in order to deter entry,induce exit, or discipline (reduce the future ou tput of) a rival. Signalling of private information about market conditions thro ugh price can give rise to predation aimed at the latter two objectives. However , in separating equilibrium, no extra exit or output reduction is induced relati ve to the full information benchmark. Nevertheless, such predation is not innocu ous, because the expectation of its occurrence may reduce entry. Copyright 1986 by Royal Economic Society.

Date: 1986
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://links.jstor.org/sici?sici=0030-7653%2819861 ... CO%3B2-%23&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:38:y:1986:i:0:p:75-93

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Oxford Economic Papers is currently edited by James Forder and Francis J. Teal

More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().