search query: @indexterm Predatory pricing / total: 5
reference: 4 / 5
| Author: | Cabral, L. Riordan, M. |
| Title: | The learning curve, market dominance, and predatory pricing |
| Journal: | Econometrica
1994 : SEP, VOL. 62:5, p. 1115-1140 |
| Index terms: | LEARNING CURVES PREDATORY PRICING MARKOV CHAINS |
| Language: | eng |
| Abstract: | Strategic implications of the learning curve hypothesis are analyzed in a model of a price-setting, differentiated duopoly selling to a sequence of heterogeneous buyers with uncertain demands. A unique and symmetric Markov perfect equilibrium is characterized, and two concepts of self-reinforcing market dominance investigated. Introducing avoidable fixed costs and possible exit into the model yields a new theory of predatory pricing based on the learning curve hypothesis. |
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