Chapter 17An Economic Framework for Assessing Predation in Air Services: Markets, Barriers to Entry, Market Power and Tests
Colin A. Gannon
'... Competition in the real world is inevitably imperfect ... naturally monopolistic or oligopolistic (in) most airline markets.'
Professor Alfred E. Kahn (Former Chairman, US CAB), 1988
1. Introduction
1.1 Predation Defined
It is useful at the outset to set down a working definition of predation for this chapter. Predatory behaviour is '... foregoing of maximum current profits in order to eliminate competitors or deter or delay entry, so that greater profits can be earned in the longer run', Dodgson et al. (1990).
A predator's objective is to earn higher profits (in present value terms) by taking actions ...
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