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Example of predatory behavior

Assume that a new Wal-Mart is built just outside a small town, and also Wal-Mart aggressively cuts prices therefore much that the rivals close their doors. In that case, once its rivals exit the market, the Wal-Mart raises prices significantly. Wal-Mart’s actions are an illustration of: (1) limit pricing. (2) predatory behavior. (3) accommodation. (4) dynamic games. (5) asymmetric payoffs.

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