Micol Manenti

Predatory conduct: optimal deterrence and false positive errors (Jel: L40, L41, K41)

  • Abstract

Informations and abstract

Keywords: competition, predatory bidding, deterrence, wrongful conviction.

The paper moves from the awareness of the close proximity between the phenomena of procompetitive price cutting and the predatory ones. Within this context, the aim of present work is to propose a reflection about the difficulties connected with a thorough investigation of the judicial unilateral exclusionary practices that occur through the alteration of the price parameter of purchase or sale of an good. The need of competitive dynamics preservation against suboptimal deterrence risks (associated with too permissive legal standards) is compared with the necessity of not underestimating the consequences, in terms of social cost, related to false positives. Through the Us Weyerhaeuser case study, on a charge of predatory bidding, we will demonstrate how, in a court, the failure in the implementation of economics criteria for a finding of unlawful conduct (allegedly anticompetitive) can bring to the protection of inefficient competitors. The examination of the documents, placed on the file of the process, is entirely new, has been translated into a series of original charts supporting the discussion. Their analysis demonstrated that every conviction has to presuppose not only a preventive assessment of the primary parameters of symptomatic predation but also the presence of objective justifications for the adoption of the examined behaviour.

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