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Illustrating A Behaviorally Informed Approach To Antitrust Law: The Case Of Predatory Pricing, Avishalom Tor

Journal Articles

One of the core assumptions of the traditional economic approach to antitrust law is that competitors are perfectly rational, profit-maximizing, decision makers. Sometimes, this assumption serves as a useful simplification of business behavior, providing an effective foundation for antitrust doctrine. At other times, however, assuming strictly rational behavior on the part of competitors is not “approximately right” but, instead, “perfectly wrong.” In these latter cases, the reliance on the perfect rationality assumption can lead scholars to mispredict market behavior and, possibly, advocate erroneous prescriptions for antitrust policy. In contrast, a behaviorally informed approach to antitrust law is based on scientific …