![]() ![]() Distinguishing features of the framework include a broader delineation of indicators that potentially predatory behavior might have occurred, an expanded view of the possible motivations for aggressive and predatory pricing behavior that are not admitted into current analyses, and a more comprehensive analysis of competitors' strategic responses to such pricing and the varying consequences of these responses. However, it can be difficult to prove that prices dropped because of deliberate predatory pricing, rather than legitimate. For example, under EU case law, a price could be found to be predatory, even if it were above average variable cost (AVC ), where the defendant had a plan to. The authors offer a framework for understanding aggressive and predatory pricing that incorporates research from marketing and related disciplines as well as traditional and newer streams of economic analysis. The so-called predatory merchant then theoretically has fewer competitors or even is a.Predatory pricing is considered in many jurisdictions and is illegal under some. To date, public policy analysis of such behavior has relied on traditional economic theory, with State and Federal policies creating conflicting guidelines for managers. Predatory pricing involves the direct attempt by a major competitor to drive other companies out of business by setting prices unrealistically low. Answers from the National Economic Prosecutors Office (NEPO). Although aggressive pricing by one firm may initially provide lower prices to consumers, the behavior also can be predatory and ultimately result in undesirable welfare consequences. Predatory pricing can be used as a marketing tool, especially when the company is new or has an excellent product. ![]() The authors examine competitive interaction in the context of aggressive pricing strategies. ![]()
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