Are Predatory Commitments Credible?: Who Should the Courts Believe? (Hardcover)

by John R. Jr Lott (Author) "In 1980, the predominant view among economists was that predatory price cutting would rarely if ever be profitable (see Bork 1978, Easterbrook 1981, and McGee..." (more)
Key Phrases: nonpredatory firms, price drop year, predation charges, United States, Standard Oil, Ninth Circuit (more...)

Editorial Reviews

Review
...in Are Predatory Commitments Credible?, John R. Lott Jr. masterfully picks apart the game theorists' argument. -- The Wall Street Journal, David R. Henderson

Product Description

Predatory pricing has long been a contentious issue among lawmakers and economists. Legal actions are continually brought against companies. But the question remains: how likely are firms to cut prices in order to drive rivals out of business? Predatory firms risk having to keep prices below cost for such an extended period that it would become cost-prohibitive. Recently, economists have turned to game theory to examine circumstances under which predatory tactics could be profitable.

John R. Lott, Jr. provides long-awaited empirical analysis in this book. By examining firms accused of or convicted of predation over a thirty-year period of time, he shows that these firms are not organized as the game-theoretic or other models of predation would predict. In contrast, what evidence exists for predation suggests that government enterprises are more of a threat.

Lott presents crucial new data and analysis, attacking an issue of major legal and economic importance. This impressive work will be of great interest to economists, legal scholars, and antitrust policy makers.

Product Details

• Hardcover: 176 pages
• Publisher: University Of Chicago Press; 1 edition (July 1, 1999)
• Language: English
• ISBN-10: 0226493555
• ISBN-13: 978-0226493558
• Product Dimensions: 9.3 x 6.4 x 0.8 inches
• Shipping Weight: 15.8 ounces (View shipping rates and policies)
• Average Customer Review: 4.9 out of 5 stars See all reviews (7 customer reviews)
• Amazon.com Sales Rank: #2,208,489 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

12 of 12 people found the following review helpful:

5.0 out of 5 stars Provides Much-Needed Empirical Study of Predation Theories, September 26, 1999

By	Donald J. Boudreaux (Burke, VA United States) - See all my reviews

Despite the large number of lawsuits and bureaucratic actions taken against firms alleged to be "predatory pricers," there has been surprisingly -- no, shockingly -- little empirical analysis of predatory-pricing theories. John Lott's book offers what is far and away the most extensive and intensive empirical analysis of the new wave of game-theoretic predation theories that first emerged in the early 1980s. Lott uses ingenious empirical tests (guided by carefully reasoned economics) to see if these new theories hold water. He finds that they don't.

This book is a must-read for anyone who wishes today to comment upon the law or economics of predation.

12 of 12 people found the following review helpful:

5.0 out of 5 stars Must Reading for the Microsoft and American Airlines Cases, July 29, 1999

By A Customer

If you want to understand the government's charges against American Airlines or Microsoft, this book lets you know where they are coming from and why their cases make so little sense. I saw Lott recently on CSPAN discussing this book and it lived up to its billing. As the Chicago Professor says in a dust cover blurb, Lott demolishes any evidence that predatory pricing is an important phenomenon. This book is worthwhile reading even if you only want to learn how to set up and present empirical evidence in a clear convincing manner. I was particularly impressed by how he took the time to clearly describe the arguments on both sides of the debate.

10 of 10 people found the following review helpful:

5.0 out of 5 stars Terrific book, June 19, 2000

By	Richard Mckenzie (Southern California) - See all my reviews (REAL NAME)

If you like logical discussions that lead to insights you had not anticipated, this is a book you will enjoy. One such insight is that the predatory commitments of government agencies are likely to be more credible than the predatory commitments of private firms. Lott's book is one of those infrequently found books that requires that you sip a glass of wine as you read one chapter each night, and enjoy taking both the book and wine slowly. Very highly recommended.