Predatory Pricing in an Oligopolistic Framework

Dermot Nolan
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Dermot Nolan: Department of Economics, Royal Holloway, University of London

No 98/4, Royal Holloway, University of London: Discussion Papers in Economics from Department of Economics, Royal Holloway University of London

Abstract: In this paper we study the nature of predatory behaviour in an oligopolistic framework. We use the long-purse story of financial vulnerability to demonstrate that predatory behaviour is less likely to occur in an oligopoly than in a monopoly. We show the nature of the free-rider problem, and illustrate the range of multiple equilibria that may exist in this situation. We also show how small firms may actually be less likely targets for predatory attacks than their larger, more efficient rivals.

Pages: 39 pages
Date: 1998-02, Revised 1998-02
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