predatory pricing strategy

predatory pricing strategy
1) The pricing of goods or services at such a low level that other firms cannot compete and are forced to leave the market. While it has long been accepted that some firms resort to predatory pricing on occasions, the application of game theory to strategic behaviour has shown that predatory pricing is unlikely to occur very often as it is at least as painful for the predator as for the victim. This encourages most potential predators to look for a more cooperative plan. See also price war
2) An illegal pricing strategy in which a product is offered at a low price to eliminate competition and the price is subsequently raised after the competition has been eliminated.

Big dictionary of business and management. 2014.

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