Predation

Predation and International Trade Economy

In relation to international trade economy, Christopher Mark (1993) provided the following definition of Predation: In international trade contexts, an aggressive pricing strategy in which a foreign producer prices below cost to drive domestic firms out of business, leaving the foreign firm with effective market power. Predation may involve pricing below marginal cost, possibly supported by government subsidies. Proponents of antidumping duties often justify such measures on grounds of preventing predation by foreign firms; critics maintain that a predatory pricing strategy is implausible in global industries that include many producers.