Saturday, October 6, 2018

Free versus predatory prices

Here's a new paper exploring the anti-competitive effects of giving things away for free:

An Introduction to the Competition Law and Economics of 'Free'

Forthcoming, Antitrust Chronicle, Competition Policy International
Many of the largest and most successful businesses today rely on providing service at no charge to at least a portion of their users. Free services often delight users, yet also create a series of challenges for competition policy, including impeding entry, inviting overproduction on quality, and increasing the risk of deception and overpayment. This short paper presents these problems, examines the strategies that entrants can attempt when competing with free service, and considers possible regulatory responses.

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