The Economist Going Austro-Demsetzian?

25 August 2009 at 4:48 am Leave a comment

| Nicolai Foss |

Most observers of industrial organization will readily agree that so-called “predatory pricing” is a rare phenomenon. Nevertheless, it remains one of the most hotly debated topics in industrial organization theory and in practical competition policy, probably because it is a particularly conspicuous example of the “abuse of a dominant position” (to use EU competition policy lingo).

In its most recent issue, The Economist has a nice discussion of predatory pricing, prompted by the recent EU Intel case. The article opens by citing Coase, but in actuality its owes much more to Harold Demsetz (cf. this classic paper) as well as Austrian writers on industrial organization such as Dominick Armentano (cf. this paper). The article is excellent as a basis for discussion in classes on industrial organization.

Entry filed under: - Foss -, Public Policy / Political Economy, Recommended Reading.

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Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
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