Litigative Economics

RRC has extensive experience in assisting attorneys in relating complex legal matters to economic, financial, and statistical evidence. RRC has been successful in the analysis of issues such as contract violations, product liability and warranty, theft of trade secrets, discrimination, monopolization, price-fixing, monopsony purchasing, boycotts, licensing restrictions, and damage theories. Often economic evidence suggests a line of argument, supported by sound economic theory, which narrows
the scope of a case and offers an efficient, effective avenue for successful litigation. 

Predatory Pricing

While the conditions under which predatory pricing makes economic sense are rare, there are observable implementations of predatory pricing designed to eliminate a competitor. However, under the Areeda-Turner rule, establishing proof of predatory pricing is difficult in some Federal courts. When a firm sells one product at a reduced price, it can lose sales of a substitute product it also markets. At least one recent court decision has attacked the inclusion of lost sales of substitute products as a component of the relevant measure of cost, but another has permitted its inclusion in support of the predatory pricing argument. For some industries, the loss of alternative revenue in product pricing is a substantial component in measuring the firm's short run loss (or investment in market power). In these industries, the broader economic analysis of the firm's choices is critical to the determination of the relevant measure of cost. In any predatory pricing suit, the evaluation of barriers to entry remains a key component in the analysis. Some recent cases have extended the application of the predatory model to predatory buying.