At Market Power, Phil Miller is all over the accusation the Sam's Club is engaging in "predatory pricing" of gasoline in voliation of Minnesota's minimum gas price law:
First, if consumers in the small town have an option to buy low-price gasoline at a "corporate" gas station, why should the government restrict their options and how would this be devastating to the community? It would have just the opposite effect. Sure, the owner of the gas station would feel a negative effect, but the consumers of gas in the small town would gain. Not only could they get gas cheaper, but they can put the savings towards the purchase of other things.Second, those who use the predatory pricing argument say they fear monopolization. Never mind that the evidence suggests that predatory pricing exists in models but not in practice.
Posted by Kevin on April, 1 2005 at 12:04 PM
