Predatory Pricing Issues

Predatory pricing refers to such kind of behavior:a dominant firm sells its products at an unfair low price(usually below its cost)in order to drive its competitors out of the market.Most countries use antitrust law to regulate this behavior. The main reason to regulate this behavior is that it may cause monopoly and monopoly will induce social welfare lost.In western countries who has long history in antitrust law,there have remarkable literature research and juridical cases already been done on predatory pricing behavior. Take United States as an example,a relatively reasonable set of standards to judge predatory pricing behavior has been formed,which has played effectively on regulation of predatory pricing behavior.In China,the knowledge of predatory pricing is still vague,and so far there has been no definite law and certain authority department to regulate this behavior.The problem of predatory pricing behavior brings many challenges to the economic and juridical area in China.Therefore,it is necessary to do some research on this issue from the perspective of economics and law regulation,by referring to the experience of other countries to give some suggestions to the anti-predatory pricing regulation in China.This paper divides into four parts.In the first part,it explains significance of the question which will be discussed in this paper.It examines the definition of predatory pricing and explains why we should take measures to regulate this behavior.In this part,a conclusion is drawn that predatory pricing may retard competition and induce the result of monopoly and social welfare lost.So it is necessary to take some effective measures to regulate it.In the second part of this paper,further discuss the monopoly possibility of predatory pricing behavior from the theoretical perspective by introducing the theoretic discussion on predatory pricing behavior in western academic area.In the third part,by referring to juridical practice experience in United States,it examines a set of juridical standards on predatory pricing.Finally,in the last part,this paper analyze the price competition behavior in China,discuss how to take effective measures to regulate predatory pricing behavior accordingly.At last,it gives...