摘要：A ban on pricing below cost was implemented under the 1987 Groceries Order based onthe premise that loss leading used in multi-product retail pricing distorts competition and exploitsconsumers in the short run, while driving a more concentrated structure and reducing welfare inthe long run. Loss leading is examined for multi-product retailers selling in imperfectly competitivemarket niches with imperfect consumer information. We develop a theoretical argument in a simpletwo-stage framework that illustrates how loss leading on a subset of products is an equilibriumoutcome of price competition that leaves overall welfare equal to that observed under laissez faire
