Predatory pricing in a multiple market experiment: A note

Isaac and Smith (1985a,b) present a strong behavioral case that predatory pricing is not an observable laboratory phenomenon. We propose several modifications of their design, resulting in a multiple-market experiment in which predatory pricing is present. The primary modification involves conducting several markets concurrently, providing an active ‘escape’ opportunity for any prey and a potential reward to a reputation for predation. These results provide a ‘behavioral existence proof’ for the predatory pricing phenomenon. They do not address the issue of the phenomenon's behavioral robustness.