How Much Predation Occurs?
Almost the only plausible economic basis for antidumping laws in the U.S. is to guard against predation by foreign firms exporting to the U.S. Before about 1980, the broad consensus of the economics profession was that predation wason theoretical grounds– very unlikely to occur.(14) Since 1980, there has been a variety of theoretical work in the economics of industrial organization that demonstrates that models of predatory behavior can be constructed in which the predation is rational and profitable.(15) But the practical relevance of these modelsand the actual frequency of predationremain open to doubt. II B.) The Costs and Benefits of a Legal Predation Standard Even if predation were a common phenomenon, however, a question would remain about the most efficient legal rule to prevent it. The issue, clearly, is that any gains from a legal predation rule may well be more than offset by losses if aggressive competition is restrained. Ordover and Saloner seem quite justified in their
