Predation and multiproduct firms: an economic appraisal of the Sievers-Albery results

Article Abstract:

Mark Sievers and Brooks Albery postulate a standard for predatory pricing, according to which all pricing by a dominant company that results in negative profits for a more efficient, competing business is illegal. This standard rests on a dubious theoretical basis for multiproduct firms. Efficiency alone does not assure a business of profit in a multiproduct world. Sievers and Albery imply that government regulation is needed, but government regulation in the allocation of overhead costs would void the role prices play in eliminating inefficient businesses.

Criticism and interpretation, Sievers, Mark, Albery, Brooks

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Kodak: enlightened antitrust analysis and traditional tying law

Article Abstract:

The Supreme Court's decision in Eastman Kodak Co v. Image Technical Services Inc shows an improved analysis of antitrust and tying issues. The Court ruled that antitrust actions may be brought against manufacturers, such as Kodak, for restrictive practices in service and parts aftermarkets. The Court supported economic learning while rejecting claims based purely upon economic theory, and tying agreements were viewed by the Court as tending to restrict competition and so come under antitrust purview.

Tying agreements, Tying arrangements

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Strategic allocation of overhead: the application of traditional predation tests to multiproduct firms

Article Abstract:

Predatory pricing can be practiced by a dominant company in a multiproduct industry without setting its prices below marginal costs and without reduced profits. Four requirements must be met: there must be a market with at least one area where competition is ineffective, a market in which the dominant firm is the price leader, the demand for the non-dominant companies' products is in the more competitive areas of the market and substantial overhead costs.

Management, Overhead costs

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