The Areeda-Turner Test for Exclusionary Pricing: A Critical Journal.

Few scholarly articles have had the impact enjoyed by Areeda and Turner's (Harv Law Rev 88(4):697-699, ) article on predatory pricing, which is elaborated in the Antitrust Law (Areeda and Hovenkamp in Antitrust law. Aspen Publishers, New York, ) treatise. Proof of predatory pricing under the Areeda-Turner Test requires two things: a market structure plausibly indicating the possibility of 'recoupment,' and prices below a relevant measure of cost, which was presumptively average variable cost (AVC). That so many courts embraced the Areeda-Turner Test might seem surprising, given that contemporary assessments from economists were quite negative: They faulted the AVC test itself, the test's inadequate consideration of fixed costs, and the exclusive focus on short-run (nonsustainable) strategies. [ABSTRACT FROM AUTHOR]