View source for Standard Oil and Predatory Pricing: Myth Paralleling Fact

<!-- you can have any number of categories here -->
[[Category:James Dalton]]
[[Category:Louis Esposito]]
[[Category:John McGee]]
[[Category:Standard Oil, Monopoly and Predatory Pricing]]
<!-- 1 URL must be followed by >= 0 Other URL and Old URL and 1 End URL.-->
{{URL | url = https://www.jstor.org/stable/23884927}}
<!-- {{Other URL | url = }} -->
<!-- {{Old URL | url = }} -->
{{End URL}}
{{DES | des = How and possibly why John McGee's false and revisionist history of Standard Oil became so influential. (Behind JSTOR paywall.) | show=}}
<!-- insert wiki page text here -->
<!-- DPL has problems with categories that have a single quote in them.  Use these explicit workarounds. -->
<!-- otherwise, we would use {{Links}} and {{Quotes}}  -->
{{List|title=Standard Oil and Predatory Pricing: Myth Paralleling Fact|links=true}}
{{Quotations|title=Standard Oil and Predatory Pricing: Myth Paralleling Fact|quotes=true}}

{{Text |
Standard Oil and Predatory Pricing: Myth Paralleling Fact
Author(s): James A. Dalton and Louis Esposito
Source: Review of Industrial Organization, Vol. 38, No. 3 (May 2011), pp. 245-266 Published by: Springer
Stable URL: http://www.jstor.org/stable/23884927
Accessed: 13-05-2018 21:18 UTC
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://about.jstor.org/terms
  Springer is collaborating with JSTOR to digitize, preserve and extend access to Review of Industrial Organization
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms
 Rev Ind Organ (2011) 38:245-266 DOI 10.1007/sl 1151-011-9280-1
Standard Oil and Predatory Pricing: Myth Paralleling Fact
James A. Dalton • Louis Esposito
Published online: 24 February 2011
© Springer Science+Business Media, LLC. 2011
Abstract The Supreme Court in 1911, on the occasion of the first major test of the Sherman Act, ordered the dissolution of the Standard Oil Trust. In his 1958 paper John McGee argued that predatory pricing is, in general, irrational and, relying solely on the information in the Trial Record related to that decision, concluded that Standard Oil did not engage in predatory pricing. His paper has had an extraordinary influence on both antitrust policy in the United States and economic lore. This paper documents the breadth and scope of the influence of McGee's paper and offers several possible explanations for it. We suggest four reasons: (1 ) the lack of a theoretical challenge for 25 years, (2) the failure of scholars to replicate McGee's empirical findings, (3) the unique status of the Standard Oil case in the history of American antitrust and (4) the influence of the Chicago School on economic and legal thinking.
Keywords Chicago School • Dominant firm • Predatory pricing • Standard Oil ■ Strategic models
1 Introduction
The decision of the US Supreme Court in 1911 to dissolve the Standard Oil Trust was based on the evidence related to how the Trust was formed and governed. The
J. A. Dalton • L. Esposito (ES)
Economics Department, Boston College, 140 Commonwealth Ave., Chestnut Hill, MA 02467, USA e-mail: louisesposito@comcast.net
J. A. Dalton
e-mail: jdalton7@comcast.net
L. Esposito
Professor Emeritus of Economics, University of Massachusetts Dartmouth, Dartmouth, MA, USA
*0 Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 246 J. A. Dalton, L. Esposito
courts did not evaluate the exten behavior and strategy.' John M eral, irrational and, relying sol that Standard did not engage in influence on both antitrust poli ing in the International Encyc underestimate the influence of and legal practice (2008, p. 428
Duringthepast50years,man have accepted McGee's conclusi analyses indicating that (a) pred mizing long run profits,(b)do predatory pricing and (c) Standa ior, including predatory pricing usingthesameTrialRecordas
in the Trial Record to conclude Consequently, two universes ha predatory pricing is deemed irr in which predatory pricing can
This paper carefully document paper on the views and/or opin several explanations for how the briefly describes McGee's meth to predatory pricing. Section 3 McGee's conclusions but neverth observers. Section 4 presents evid of McGee's paper on scholars in on judicial thinking. In Sect. 5 McGee's analysis and conclusion of the substantial evidence and offers concluding comments.
2 McGee's Findings
McGee argued that predatory p muchlargermarketshare,the of the prey. Second, an efficient capitalmarketwouldsupplyitw forced to close down in the short the plant when the predator su
W ith respect to his exam inati examples" of alleged predatory
1StandardOilCompanyofNewJersey 2 See also the concise summary of Mc
Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 Standard Oil and Predatory Pricing 247
against competing refiners" and seven cases
retailers." Of the twelve cases involving refi
McGee's presentation of the facts and analy
and analyses of the other seven refining cas
of a page or less. W ith respect to the seven
four of the cases discussed specific pricing be
in each of these cases the facts and analyses
of a page or less. On the basis of what he a
the Trial Record in each of these cases, McG
supporting the allegation that Standard Oil its rivals.
3 Information and Research Contradicti Findings
In this section we discuss (a) information on Standard's pricing behavior that was not in the Trial Record but existed in the public domain before 1958 and (b) studies by other researchers that provide new insights on the rationality of predatory pricing and additional evidence on the incidence of predatory pricing. Finally, we summarize our recently published research on the re-evaluation of the Trial Record that rejects McGee's conclusions about Standard's pricing behavior.
3.1 Information Available Before 1958
John McGee used only the Trial Record in the case brought by the US government. Reliance on only this database renders unacceptable a strong conclusion of "no evi dence of predatory pricing by Standard Oil." As discussed below the data available in the Record are of limited value and there were other sources of information that could have and should have been used.
Standard had a 90% share of petroleum refining and marketing, possibly as early as 1872, after acquiring numerous refineries by that date.3 The Trial Record was devel oped after 1906. Consider the inherent problem of collecting information: How many
witnesses and relevant documents were available to investigators in 1906 that could provide accurate information covering the prior 34 years? Indeed, of the five major
3 Standard controlled only 10% of the refining industry in the United States in 1870; by 1880 it had 90% of refining capacity and controlled the gathering lines in the crude fields, the pipelines, and rail transportation. From that time forward, Standard persistently controlled 80-90% of refining, shipping and marketing in the United States, while similarly dominating the export of refined oil products. As late as 1907, shortly after the United States filed its monopolization complaint against Standard Oil on November 15, 1906, Standard refined and marketed more than 87% of domestic and exported kerosene, and the company was more than twenty times the size of Pure Oil, its next largest rival (Chernow 1999, p. 537). Weinberg (2008, p. 80) cited to an article published on June 2, 1876 in The Derrick Handbook of Petroleum which concluded the Standard "now owns or controls nearly every oil refinery in the region."
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms
Springer

 248 J. A. Dalton, L. Esposito
cases4 relied upon by McGee, vi
1886, well after Standard had a
in the Record was not develope
conceptualframeworks5;and n testified.
Ofequalimportanceisthefac does not warrant an uncritical not the only data source availab used predatory pricing prior to of any results based solely on th predatory pricing to attain and marketsinwhichitoperated.T available from the turn of the tw with respect to Standard's use o should have recognized that, g that Standard did not use preda
3.1.1 Rockefeller Papers
As early as 1970, Scherer, clearl determining whether Standard bothered to cast his net furthe papers, he would have found that through price cutting."6 John well before 1958. In fact, the R major source of information fo later revised in 1953. Nevins' bio was a high likelihood that Stand have resulted in predatory pri Rockefeller papers in their disc
4 McGee analyzed only five cases with Cleveland Acquisitions that Granitz and the Cleveland Acquisitions. Equally as im the specific acquisitions occurring 34 ye and Esposito (2007) analyzed the other f recentyears.Testimonyregardingthe tury. The SS&T case covered 1880-1901 Cornplanter was founded in 1888 and t Esposito also examined in an Appendix
1901 (pp. 204-205).
5 Scherer argued that even more recent c fail to elicit proof of the m ain point at
6 Scherer (1970, p. 275) quoted from a 1881:"Wewanttowatch,andwhenourv to 50% or less, it m ay be a very serious with a view of taking substantially al Scherer repeated this admonition in th
Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 Standard Oil and Predatory Pricing 249
Rockefeller aggressively pursued orderl competition, from as early as 1869 or 1 edged that "The idea was mine" to organize Standard Oil Company (Nevins 1953, II, p translated into a monopoly or a cartel in w Nevins characterized attacks on "the price having been "well justified (1953, II, p. 37 Papers, taken as a whole, indicates that Sta and had a philosophy consistent with a pol
3.1.2 Other Contemporaneous Sources
Numerous other reports available from the decade of the twentieth century provide in itive behavior that is consistent with the hy
pricing.
(a) The Bureau of Corporations was created in 190310 specifically to investigate the behavior of Standard. Its reports in 1906 and 190711 formed the basis for the Justice Department's antitrust suit against Standard (Winerman 2003, pp. 1-2) and reported on Standard's discriminatory transportation rates, the relationship between its pricing and profits, and alleged unfair marketing (Johnson 1959, pp. 585-587.)
(b) Granitz and Klein (1996) used numerous sources from the nineteenth and early twentieth centuries to argue that Standard used its influence over the railroads to establish a cartel that raised the transportation costs of its rivals, thereby raising rivals' costs. This behavior is predatory because that behavior excludes rivals that have costs equal to, or lower than, the costs of the dominant firm.12
7 Rockefeller attributed "ruinous competition" in the industry to "the overdevelopment of the refining industry" [RAC, Inglis notes, 4.8, "Cleveland" (as cited in Chernow 1999, 130, fn. 5)]. Consequently, Rockefeller argued that "The day of combination is here to stay. Individualism has gone, never to return" [RAC, Inglis notes, 4.8, "Genesis of the Standard Oil" (as cited in Chernow 1999, p. 149, fn. 82)]. By 1873, "We proved that the producers' and refiners' associations were ropes of sand (Nevins 1953, II, p. 16)." Yergin illustrated this drive for order by noting that, whereas Rockefeller vertically integrated from refining into transportation and marketing, he stayed away from production of crude oil until the late 1880s because "It was too risky, too volatile, too speculative (1991, pp. 51-53)."
8 Nevins (1953, II, p. 67) offered a similar conclusion in 1941 in his first biography of Rockefeller when he stated that Rockefeller's "basic condition" was to establish and maintain order and "required him to warn off or drive out every possible entrant."
9 For additional examples of information from the Rockefeller papers that was used by Nevins, Chernow and Yergin, see pp. 160-162 of our 2007 paper.
10 For its purposes and history, see lohnson (1959). The Bureau was the seed for the formation of the Antitrust Division and the Federal Trade Commission (Winerman 2003, p. 2).
11 The 1906 report addresses the interstate transportation of petroleum products and the two-volume 1907 report surveyed most aspects of the petroleum industry.
12 Posner (1976, p. 8) also labeled this behavior "predatory".
•£) Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 250 J. A. Dalton, L. Esposito
(c)IdaTarbell'stwo-volumestudyo gations of predatory pricing. Becau one should not necessarily dismiss the question of whether a definit predatory pricing is possible, solely
(d) At least ten states sued Standard to Standard's dissolution, thus gener of government hearings addressing
3.2 Research and Evidence Available
3.2.1 Theoretical Challenges to McGe
W hereas the legal system has been sk demonstrated during the past 30year adominantfirm.McGee'sargument several assum ptions and one m ajor o ator reduces the price on all its outp capital m arkets (i.e., the absence of a there are no demonstration effects (i responses of the dominant firm to n strategic behavior in his analysis.
In one of the first comprehensive c (1976, pp. 185-187) argued that a per nalhadsimplynotbeenmade.With Posner argued that since Standard op not have to cut its price on all its o inselectivegeographicmarkets.Even
entry,accordingtoPosner.Withres ket imperfections, Posner also stated in resolving legal disputes, yet litiga inform ation exist in real m arkets be expectations as to the outcome of the
13 Chem ow (1999) sim ultaneously applauded ica'smostsecretivebusinessandshowedallth also arguing that "However path-breaking an not, finally, stand up as an enduring piece of and professor of journalism, praised her publi journalism ever written (p. ix)" and lauded h and journalistic credibility, a linkage poorly p century (p. 120)."
14 For a discussion of these sources and cite review of the book (1980), Bringhurst asserts case, 21 states had brought antitrust actions a
^ Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 Standard Oil and Predatory Pricing 251
A very important common feature of contemp the recognition of asymmetric information and viewed in the context of strategic behavior, p increase or sustain market power if it deters firm can employ a strategy of significantly low of convincing smaller firms and potential entra it is the low-cost firm and could profitably o fact, not the low cost firm. By its actions the potential entrants and the capital markets that is willing to sustain losses in the short run to p other words, the dominant firm by its actions in anyway accommodate the entry of new firm costs of the potential entrant relative to the do the incumbent firm's reaction to entry diminis as well as the willingness of the capital mark
( 1993, p. 162) has suggested that even with less aggressive price-cutting by an incumbent can are better informed about their prospects tha economists (Greene et al. 1996, p. 44, fn. 151) predatory behavior can indeed be successful i when uncertainty and market imperfections ar
3.2.2 Empirical Studies of Predatory Pricing
There is a substantial body of research that employed a predatory pricing strategy at one t
(a) Koller (1971) examined forty cases of alle three cases that he judged to contain suffic prédation was actually attempted in seven them. However, Zerbe and Cooper (1982) a ined by Koller and concluded that predator
cases.
(b) Elzinga ( 1970), in his study of the Gunpowder Trust, found t
cases (for which adequate data were available) involved predat ever, Zerbe and Mumford (1996) reclassified the cases in Elz using "a more generous definition of predatory pricing," fou the eleven cases for which adequate data were available preda
present.
(c) Gabel (1994) showed that AT&T used predatory pricing against independent
providers of service in the Midwest during 1894-1910.
15 For example, see the analyses by multiple economists in Greene et al. (1996), and see also Milgrom and Roberts (1982a,b, 1990), Milgrom and John (1992), Klevorick (1993), Bolton and Scharfstein (1990) and Cabrai and Riordan (1994).
16 This discussion draws heavily on concepts and ideas contained in Milgrom and Roberts (1992, pp. 128— 162) Greene et al. (1996), Bolton et al. (2000), Cabrai (2008), Pepall et al. (2008, Ch. 13).
Ô Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 252 J. A. Dalton, L. Esposito
(d) Burns (1986) found that A of the twentieth century as a negotiations with smaller riv
(e)GenesoveandMullin(1998
pany at the turn of the twent new firms entered the market
(f)Yamey(1972)andScottM ish shipping cartels of the n employed predatory pricing
3.2.3 Findings by Dalton and
Although there is a substantial
be rational and although ther
that Standard probably emplo conclusion that the Standard Oil Trial Record contained no evidence that Standard Oil
had engaged in predatory pricing. In fact, Peltzman in 2005 established an essential justification for a re-evaluation of McGee's work when he wrote:
The large firm that crushes small rivals with ruinous bouts of below-cost prices is a durable part of the folklore of American capitalism. The story evokes images of late nineteenth century robber barons swashbuckling their way to monopolies; the specific example of John D. Rockefeller and the Standard Oil Trust prob ably comes most readily to mind. That example is also important because the practice is illegal and played a role in the antitrust case that broke up Standard Oil. The idea that predatory practices of one sort or another are an important source of monopoly continues to exert a powerful hold both inside and outside the economics profession. The locus classicus of historical revisionism in these matters is John McGee's article on the Standard Oil case... (p. 316).
Our 2007 paper re-examined the Trial Record, using only cases cited by McGee in his 1958 paper, to determine whether McGee's findings could be replicated. As stated earlier, in his 1958 paper McGee cited nineteen cases as "principal examples" of alleged predatory pricing. In on\y five of those cases did McGee's analysis involve at least one page. These five "major" cases were (1) the Cleveland Acquisitions, (2) the Rocky Mountain Oil Company, (3) Scofield, Shurmer and Teagle, (4) Fehsenfeld (the Red C Interests) and (5) Cornplanter Refining Company. With one exception (the Cleveland Acquisitions), we analyzed each of these cases in detail. Given the extensive analysis by Granitz and Klein of the Cleveland Acquisitions and the Trial Record's very weak body of information on these acquisitions which occurred around 1872, we saw no need to analyze the Cleveland Acquisitions.17
17 McGee (1958) argued that merger was a lower cost alternative to predatory pricing and that Standard paid a premium to purchase rival refineries. Granitz and Klein analyzed the Cleveland Acquisitions in detail and concluded "there is considerable testimonial evidence that Standard used the South Improvement Com pany to induce Cleveland refiners to sell and that many of these sales were at distress prices ( 1996, p. 15)." Further, Granitz and Klein (1996) found that Standard was able to reduce the value of rival refineries when
Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 Standard Oil and Predatory Pricing 253
It was our view that if we found substantial e we analyzed indicating that Standard Oil eng ysis of the other "minor" cases analyzed by
a finding in four of the five major cases an evidence to suggest that Standard engaged in p
to contradict McGee's conclusion.
After a very detailed analysis of the Trial Record, we concluded that the Record
in each of the four major cases contained considerable evidence of predatory pricing. Simply stated, the Record did not support McGee's conclusion that Standard Oil did not engage in predatory pricing. To the contrary, the evidence in the Record, at the very least, would have provided the Attorney General of the U. S. with a strong justification in 1906 for conducting a more complete and separate investigation into the extent and effects of Standard's predatory pricing behavior.
4 McGee's Impact on Economic and Legal Opinions and Views
McGee's findings have influenced the views and opinions of economists, lawyers and jurists since their publication in 1958, an influence that has persisted even into the twenty-first century. Kenneth Elzinga, a leading scholar in antitrust economics, noted as far back as 1970 (p. 223) that "Few articles appearing in this journal [the Journal
of Law and Economics] have been cited and reprinted as often [ai McGee's 1958 article]." Nobel Laureate George Stigler acknowledged McGee's article as a major factor for why, early in his career, he changed his opinion about the competiveness of big business.18
In terms of McGee's influence on authors of economics textbooks, two of the more prominent examples are Carlton and Perloff (2005) and Mankiw (2004). In the 4th edition of their successful industrial organization textbook, Carlton and Perloff write:
For example, one of the most widely cited examples of price prédation was the creation of Standard Oil. Supposedly, Rockefeller bought small, independent oil refineries after having lowered price to drive them out of business. McGee (1958), in his careful examination of this historical period, rejects that view and concludes that Rockefeller's rivals were bought out on rather favorable terms (p. 360).
Mankiw, in his best-selling introductory economics textbook, writes:
Footnote 17 continued
the rebates it received in return for its support of the railroad cartel effectively increased the transporta tion costs of its rivals thereby reducing the market value of acquired refineries. Note also that the Record held scanty evidence on the Cleveland acquisitions because they occurred in 1872, 34 years before the US brought suit against Standard. And McGee did not address the actions leading to Standard's mergers in such areas as western Pennsylvania, Ohio, Pittsburgh, Philadelphia and Baltimore. As to the asserted use of premiums by Standard, selective price cutting that leaves unaffected the price for the bulk of the dominant firm's sales can protect the value of those sales and make the acquired capacity of rivals more valuable to the dominant firm than to the smaller, threatened rival.
18 Stigler (1988, pp. 100-103) as cited in Diamond (2005, p. 650, fn. 10).
0 Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 254 J. A. Dalton, L. Esposito
Although predatory pricing i m ists are skeptical of this argum and perhaps never, a profitabl
Our approach to determining t paper is to analyze the predator journal articles, law review arti pricing.19 We should state that erature runs the risk of oversim what non-specialists and special themselves in the predatory pric
4.1 Economics Textbooks20
4.1.1 Principles of Microeconom
We reviewed twenty-four prin which were published after 200 of the texts and predatory pric nine other texts. Only six texts of these six texts, the authors im precisely, they state or im ply th
19 In order to generate the lists of te cases to review, several search procedur knowledge of the authors and (b) YBP L which is a website used by libraries to
M icroeconom ics, Business Econom ics, journal articles search was conducted us
1958 paper. The law review article sea all law reviews/journals for references Lexis-Nexis. A search was conducted o pricingandJohnS.McGee.Thesesearc textbooks, econom ics journal articles an in the Appendix to this paper. The App each of the books reviewed with respect two tables in the Appendix which char law review articles reviewed, whose pri available from the authors upon request 20 In som e cases several editions of a te on the latest edition of each textbook.W i sim ilar, if not identical, from edition to editions of this text, the authors im plie There was also a very limited discussion
of this text, there is an extensive discussi that predatory pricing is either irrational
21 The six textbooks are O'Sullivan et Stiglitz and W alsh (2002) and Tresch (
*£) Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 Standard Oil and Predatory Pricing 255
economic sense.22 In only one text is predato and rational pricing strategy.23 None of these ories of predatory pricing. Nor is there any d McGee paper. Finally, if predatory pricing is of economics textbook it is always presented
regulation.
4.1.2 Intermediate Microeconomics Textbooks
We reviewed seventeen intermediate microeconomics textbooks, twelve of which were published after 2000. There is no mention of predatory pricing in twelve of the texts and in two of the texts, predatory pricing is simply defined with little, if any, discus sion. This finding clearly suggests, not surprisingly, that predatory pricing is not a priority topic for authors of intermediate microeconomics textbooks. Only three texts provide any discussion of predatory pricing and two of them, both by the same lead author, include a discussion of Standard Oil as well as the McGee paper.24 In the latter two texts, the authors present a very brief discussion of the "traditional" and modern theories of predatory pricing. They imply that the modern theories are flawed and they accept McGee's conclusion that there is no evidence that Standard Oil engaged in predatory pricing.
4.1.3 Industrial Organization/Antitrust/Regulation Textbooks
We reviewed thirty-five industrial organization/antitrust/regulation books, sixteen of which were published after 2000. The vast majority of the books would be considered textbooks. Only one book did not mention, define or discuss predatory pricing. Of the remaining thirty-four books, twenty-nine books reference the McGee paper, discuss its findings (some quite briefly and others very extensively), and discuss the Chicago School view of predatory pricing (some quite briefly and others very extensively). These latter twenty-nine books can be characterized in terms of their discussion of predatory pricing in the following way:
(a) Discussion of Alternative or Game-Theoretic Models of Predatory Pricing Seventeen books discuss alternative or game-theoretic models of predatory pric ing. Of the twelve books that do not discuss alternative or game-theoretic models of predatory pricing, nine of them were published prior to 2000 and three were published in 2000 or later. Of these latter three books, two are authored by indi viduals that can be identified as members of the Chicago School.
(b) Statement about Irrationality or Rationality of Predatory Pricing
Only seven books state explicitly or imply that predatory pricing is, in general,
22 In addition, Parkin (2005, p. 334) and Bade and Parkin (2004, p. 427) state "No case of predatory pricing has been definitively found."
23 Stiglitz and Walsh (2002).
24 The two texts that include a reference to McGee paper and Standard Oil are Nicholson and Snyder (2007) and Nicholson (2002). The third text is Hirschey (2006) who on p. 472 states, "Predatory pricing practices are illegal in the United States under the Sherman Antirust Act and rarely observed."
Ô Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 256 J. A. Dalton, L. Esposito
irrational and/or m akes litt
authored by individuals that c
Twenty-two books explicitly s rational.
(c) Statement about the Frequency/Rarity of Predatory Pricing
Only five books state or imply that, although it is often claimed or alleged, "actual" predatory pricing occurs infrequently or rarely. Three of these books are authored by individuals that can be identified as members of the Chicago School.26 Twenty four books make neither an explicit nor implicit statement about the frequency of predatory pricing.
These findings are consistent with the observation that the McGee/Chicago School
view of predatory pricing has been accepted by only a small minority of I.O./Antitrust economists.
4.2 Economics Journal Articles
We reviewed 84 articles containing a reference to McGee's 1958 paper as far back
as the 1960s. Of this number, 49 articles dealt with predatory pricing at least in a secondary manner, 6 of which neither addressed the theory nor opined about the fre quency of predatory pricing.27 For 43 of these 49 articles, 9 identified directly with irrationality and/or infrequent occurrence, and 1 of this latter set of 9 also recognized strategic theory while relating to infrequent occurrence. Finally, 35 articles, includ ing the last article referenced in the prior sentence, recognized theories supporting predatory pricing as a strategic tool.
Note two aspects along a time line for the groupings of the subset of 43 articles. Of the 8 articles in economics journals specifically identifying with McGee's theory and/or with infrequency, 7 were published in the period 1970-1985 and 1 in 1997. In contrast, the 35 articles relating to the strategic basis span the 5 decades beginning in 1960:1 occurring in 1961 and 2 in 1972-1973, then growing to 15 in the 1980s, 9 in the 1990s and 8 since 2000. Consequently, this latter section of the economics literature has consistently recognized a rational basis for predatory pricing since shortly after McGee's article was published and very heavily beginning in the 1980s.
4.3 Law Review Articles
We reviewed seventy-eight law review articles dating back to 1982 that contained a ref erence to McGee's 1958 paper. Of those seventy-eight articles, seventeen referenced the McGee paper but predatory pricing was neither the primary nor the secondary
25 Clarkson and Miller (1982), Shughart (1990), Armentano (1990), Friedman (2000), Liebowitz and Margolis (2001), Carlton and Perloff (2005).
26 Armentano (1990), Friedman (2000), and Carlton and Perloff (2005).
27 The remaining 35 of the 84 articles did not develop a connection to the theory of predatory pricing, typically identifying McGee as a contributor to the Chicago School of economic thinking or listing simply his article as part of the literature on predatory pricing.
S Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 Standard Oil and Predatory Pricing 257
focus of the papers. The primary focus of vi of the Chicago School on antitrust policy an as the foundation of the Chicago School's pos pricing is, in general, irrational and rarely o
Of the remaining sixty-one articles, virtual sively) the Chicago School view of predator authors either take no position on the ration or imply that predatory pricing can be rati twenty-one of these papers the authors either in general, irrational or appears to make lit What is worth noting about these twenty-one
(a) in sixteen of these papers, the authors al occurs rarely or infrequently;
(b) in eighteen papers, the authors do not p modern strategic models of predatory pri (c) seven of these papers where published i
(d) eight papers were published between 19 (e) six of these papers were published prior
The finding that 35% (21 of 61) of the papers atory pricing is, in general, irrational sugge of predatory pricing has substantial standing
Finally, as stated above, while virtually all o or secondary focus is on predatory pricing School position on predatory pricing, only t tive views and/or modern strategic models of about these latter papers is that:
(a) thirteen were published in 2000 or later (b) five were published between 1990-199 (c) four were published prior to 1990.
The fact that 60% of the papers that include tory pricing indicates that there has been a su of "new" theories of predatory pricing in th tion and/or acknowledgement in the legal lit note that a literature search of all law jour covering the period July 2008 to July 2010, secondary focus is on predatory pricing. A and discussed its major findings. Only three discussed its major findings.
'S Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 258 J. A. Dalton, L. Esposito
4.4JudicialAcceptanceofMcG
The foundation of the Chicago pricing is, in general, irrationa modelofpredatorypricingwas Bork (1978) and Easterbrook (1
(1971). It is alm ost im possible trust policy. As one legal schol wasinstrumentalinpersuading 15 years in which it has expres pricing complaints."
The Supreme Court's decisions Ltd., et al v. Zenith Radio Corp and Williamson Tobacco Corp., ican antitrust policy with respe predatory pricing was clearly th (writingforthemajority)inM commentators that predatory p successful (p. 589)."29 Justice P as the work of Bork (1978), Ea Court reaffirmed its use of the C Kennedy (writing for the majo ita and also stated, "In Matsush predatorypricing(p.227)."Wh of predatory pricing are neithe
The skepticism of the courts wi Supreme Court decisions in Mats prosecute predatory pricing cas to the lower courts and potenti pricing and the low probability considering pressing a suit. Bolt predatory pricing did not win
28 According to Elzinga and Mills (200 finds "its genesis in the work of John 1958 paper as the "taproot" article.
29See,forexample,LopatkaandPage( explicit use of the Chicago models to af 30 Powell also cited Areeda and Turne
31 McGee's 1958 paper is cited in Adv iscitedinBarryWrightv.ITTGrinn cally for its finding that "John D. Rock com petition in the oil industry." In Bar following statement:"Yet,how often f doso,andpreciselywhen,isallmuch
m easuring costs, discerning intent, and 32 See for exam ple, Liebeler (1986), Lo
I Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 Standard Oil and Predatory Pricing 259
either were dismissed or did not survive su consider how many predatory pricing case decisions.33 Zerbe and Mumford (1996, pp opinion could have served as a barrier to su Peltzm an (2005, p. 325) noted that m ost su the federal courts by private plaintiffs an work and the Brooke decision was to have success for plaintiffs in prédation cases."
5 Why has McGee's Influence Persisted fo
McGee's influence on scholars and jurists i clusions about Standard's pricing behavior h credible information on Standard Oil's pr McGee's paper in 1958 as well as to the pro research subsequent to 1958 showed that p industries and contexts. Equally as im port had established that predatory pricing could run profits. Yet m any scholars in econom findings and exposed students to this doctr
Now wecometothecriticalquestion:How findings of this single article written 52 generally, how does one explain the contin one universe (I) where predatory pricing i a parallel universe (R) where predatory pr quently. Universe I is populated prim arily
judges who are not specialists in the field o specialists who are followers of the Chica uncritically on secondary sources.34
It can be argued that the views or opinio marily determined by what they perceive issue and/or their political and/or economi become cast in stone when there is congruen
33 Even absent these hurdles predatory pricing cases measurement, intent and recoupment contexts that m value (Peltzm an 2005, p. 325).
34 Not all "students" of the Chicago School agree wit an individual to a given school of thought can som individuals can operate sometimes within and sometim however, a broader perspective and understanding of issue are readily identifiable as being, in general, a m
33 McGee's (i.e., the Chicago School's) position, findin never became the conventional wisdom within the position on predatory pricing did achieve significant s reality, coupled with its first mover advantage, are pr conventional wisdom status outside of the economics
â Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 260 J. A. Dalton, L. Esposito
issue and their ideology. How di and frequency of predatory pr the generally accepted belief, op We believe that there are four persisted in a parallel universe.
5.1 Lack of a Theoretical Challe
McGee's paper was published in presenting alternative theories pricing could be a rational strat not appear until the early 1980 retical analysis of predatory pr ing.Anduntil2007,almost50y had undertaken a thorough and evidentiary source upon which employ predatory pricing.36 In advantage in the marketplace of
pricing.
5.2 Failure of Scholars to Replicate McGee's Empirical Findings
Historians and natural scientists readily recognize the necessity to replicate important new research findings. McPherson (2003), in his presidential address to the Ameri can History Association, stated "Interpretations of the past are subject to change in response to new evidence, new questions asked of the evidence, new perspectives gained by the passage of time. There is no single, eternal, and immutable 'truth' about past events."
McGee's empirical work is revisionist history and fits into McPherson's exhorta tion to study existing beliefs anew. McGee's findings and conclusions led to a major revision of what had been an accepted belief—that Standard Oil had employed pred atory pricing to gain and maintain its virtual monopoly of the oil industry. Respected economists have called McGee's work "seminal."37 A seminal article should spur the development of new ideas. Indeed, McGee's theoretical arguments eventually did provide the impetus for economists to develop the strategic and game-theoretic mod els to demonstrate that predatory pricing can be rational. Yet many economists and lawyers have yet to recognize and incorporate these new theoretical developments in their writing and practice.
36 Scherer, who reviewed evidence outside of the Trial Record, stated that McGee should have looked at
sources outside the Record before he rendered his conclusion. He concluded that "Had McGee bothered to
cast his net further into historical works drawing upon the Rockefeller papers, he would have found that Standard tried in some instances to drive out its rivals through price cutting" (1970, p. 275).
37 Bums (1986, pp. 267 and 291), Elzinga (1980, p. 1056), Gabel (1994, p. 543) and Kerr (2006, pp. 14 and 24.)
Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 Standard Oil and Predatory Pricing 261
Unfortunately, for almost 50 years, no on research conducted by McGee using the Sta found influence of McGee's empirical findin policy with respect to predatory pricing, one his results. Replication and/or re-examinatio and good history.
However, within the economics profession, replication, i.e., testing the same hypothesis mation used by the original researcher. From not in the best interest of either a beginning undertake replication studies.38 Even an end-o Trial Record and therefore the time and effo probably conclude that the potential benefit
5.3 The Unique Status of the Standard Oil Ca
It is difficult to understand how the view tha has persisted to this day, given the substantia documenting numerous cases of predatory studies that document predatory pricing in cartels/trusts in American and British econ Trust, the American Sugar Trust and the B and mounting evidence that predatory prici often asserted has not undermined the curre pricing rarely, if ever, occurs. For example, introductory microeconomics textbook, writ definitively found."
One possible hypothesis for the failure of pricing to undermine the conventional wisdo rarely, if ever, occurs is that the Standard mous) case in the history of American antit robber barons, John D. Rockefeller and (c) f quintessential example of both monopolizat economic history. Thus, when McGee suppos not employed predatory pricing, it became sa ably didn't occur in all the other instances words, by extinguishing the "sun" in the pre were automatically extinguished.
5.4 The Influence of the Chicago School on
John McGee was a student of Aaron Direct School, and McGee is recognized as a discipl
38 And non-mathematical treatises in economics may no ences of many editors in journals.
â Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 262 J. A. Dalton, L. Esposito
to the Chicago School, predator would rarely, if ever, expect it
Chicago School's basic tenets on in Matsushita.40
Although the Chicago School v industrial organization/antitrust macy.Thevastmajorityofindus themselves as members of the C School on the thinking of non judges has grown substantially influence of the Chicago Schoo cago School on the courts' guide standing in the economics prof
6 Concluding Comments
The influence of John McGee's judges in the area of predatory
of what has become convention
tory pricing is irrational and ra
wisdom in this particular matte
from the analysis presented in th
enforcers of public policy fail t
and rely solely on conventional
they run the risk of perpetuating and incorrect.
With respect to the myth or u tory pricing, norm ally scholars on a particular matter unless th one could argue that, given the outside of the Trial Record, the from the time the paper was pu
39 Sim ply stated, the philosophy is that t consistent with long-run allocative effic
49 The Matsushita decision came dow which covered "The ascent of the Chi
41 For exam ple, W esley Liebeler, in a pa cases filed in federal courts between 19 (theyearoftheMatsushitadecision).A one of the cases is a real predatory pric ushita and Brooke, Liebeler's conclusio this conclusion or, even just reporting i perform the most basic academic due di basic academic due diligence was the p caused by Fisher Body's opportunistic b and how it was eventually dispelled, s
<£) Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 Standard Oil and Predatory Pricing 263
research findings became available with resp ing, the actual extent of predatory pricing i behavior of Standard. However, skepticism quarters actually to have diminished rather despite the fact that by the mid-to-late 199 research on predatory pricing had become s re-evaluation of McGee's findings and conc findings would have had to conclude that M engage in predatory pricing was implausible
to this conclusion:
(a) Modern strategic theories of predatory pricing indicate that predatory pricing is most likely to occur in weak monopolies, i.e., monopolies or dominant-firm oligopolies with very low barriers to entry. Fact: Standard Oil was a weak monopoly.
(b) In order to minimize the negative impact on profits, a predator firm wants to reduce its price on the smallest possible amount of its total output. Fact: When met with new competition in one of its geographic markets, Standard did not lower its price to all its customers in that market. Rather, by using bogus wag ons, Standard only lowered the price to thoseformer customers who had switched their purchases to the new entrant,42
(c) There is substantial evidence, from sources other than the Trial Record, that Standard consistently met new competition with substantial price cuts that were consistent with a predatory pricing strategy.
(d) In carefully documented analyses, it has been shown that the two other major trusts (the Tobacco Trust and the Sugar Trust) that were operating at the same time as the Standard Oil Trust used predatory pricing to expand or maintain their market power.
In fact, the finding of our 2007 paper that there is substantial evidence in the Trial Record that Standard did employ predatory pricing should elicit the following reac tion from any careful analyst: "Based on both theory and the empirical facts, Dalton and Esposito's finding is exactly what I would have predicted." It is clearly time to bury the myth that Standard Oil did not engage in predatory pricing and also put an end to the parallel universes (irrational and rare vs. rational and not infrequent) that has existed for the past 25 years.
Acknowledgments Marketa Halova, Devlin Hanson and Murat Mungan provided conscientious assis tance in gathering research material. Parker Albee helped us to understand the standards for research in history. This article grew out of an earlier research project during which we received valuable commentary from Frank Gollop, F.M. Scherer and Richard Tresch. And we thank the economics department at Boston College for the research support it provided.
42 A bogus wagon was owned by Standard Oil but was perceived by customers as representing a marketing company independent of Standard. The purpose of a bogus wagon was to undercut the prices to customers of Standard's rivals while allowing Standard to sell at higher prices to its own customers in the same geo graphic market. McGee acknowledged that bogus wagons were used because "secrecy was useful" in order for Standard not to antagonize its own customers who were paying higher prices (p. 159).
Ô Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 264 J. A. Dalton, L. Esposito
References
Areeda, P., & Turner, D. F. (1975), Predatory pricing and related practices under section 2 of the Sherman Act. Harvard Law Review, 88, 697-733.
Armentano, D. T. (1990). Antitrust and monopoly: Anatomy of a policy failure. Oakland, CA: The Independent Institute.
Bade, R., & Parkin, M. (2004). Foundations of microeconomics (2nd ed.). Boston: Pearson Addison Wesley.
Bolton, P., Brodley, J. F., & Riordan, M. H. (2000). Predatory pricing: Strategic theory and legal policy. Georgetown Law Journal, 88, 2239-2330.
Bolton, P., & Scharfstein, D. S. (1990). A theory of prédation based on agency problems in financial contracting. American Economic Review, 80, 93-106.
Bork, R. H. (1978). The antitrust paradox: A policy at war with itself. New York: Free Press. Bringhurst, B. (1979). Antitrust and the oil monopoly: The standard oil cases. Westport, CT: Greenwood
Press.
Burns, M. R. (1986). Predatory pricing and the acquisition costs of competitors. Journal of Political
Economy, 94, 266-296.
Cabrai, L. (2008). Predatory pricing. In W. A. Darity, Jr. (Ed.), International encyclopedia of the social
sciences (2nd ed., Vol. 6, pp. 428-429). Detroit: Macmillan Reference.
Cabrai, L., & Riordan, M. H. (1994). The learning curve, market dominance and predatory pricing. Eco
nometrica, 62, 1115-1140.
Carlton, D. W., & Perloff, J. M. (2005). Modern industrial organization (4th ed.). Boston: Pearson
Addison Wesley.
Chernow, R. (1999). Titan. New York: Random House.
Clarkson, K. W., & Miller, R. L. (1982). Industrial organization. New York: McGraw-Hill.
Coase, R. (2006). The conduct of economics: The example of fisher body and general motors. Journal
of Economics & Management Strategy, 15, 255-278.
Dalton, J. A., & Esposito, L. (2007). Predatory price cutting and standard oil: A re-examination of the
trial record. Research in Law and Economics, 22, 155-205.
Diamond, A. M. (2005). Measurement, incentives and constraints in Stigler's economics of science. Euro
pean Journal of Economic Thought, 12, 635-661.
Easterbrook, F. H. (1981). Predatory strategies and counterstrategies. University of Chicago Law
Review, 48, 263-337.
Elzinga, K. G. (1970). Predatory pricing: The case of the gunpowder trust. Journal of Law and
Economics, 13, 223-240.
Elzinga, K. G. (1980). Review of Bruce Bringhurst's "antitrust and the oil monopoly: The Standard
Oil cases, 1890-1911". Journal of Political Economy, 88, 1055-1057.
Elzinga, K. G., & Mills, D. E. (2001). Predatory pricing and strategic theory. Georgetown Law
Journal, 89, 2475-2494.
Friedman, D. D. (2000). Law's order: What economics has to do with law and why it matters. Princeton,
NJ: Princeton University Press.
Gabel, D (1994). Competition in a network industry: The telephone industry, 1884-1910. The Journal
of Economic History, 54(3), 543-577.
Genesove, D., & Mullin, W. P. (1998). Testing static oligopoly models: conduct and cost in the sugar
industry, 1890-1914. Rand Journal of Economics, 29, 355-377.
Gifford, D. J. (1994). Predatory pricing analysis in the supreme court. Antitrust Bulletin, 39, 431-483. Granitz, E., & Klein, B. (1996). Monopolization by 'raising rivals' costs': The Standard Oil case. Journal
of Law and Economics, 39, 1—47.
Greene, W. L., Adelstein, R. D„ Farmer, D. A. Jr., Goldberg, M. R., McKeown, J. T. Ordover, J. A.,
et al. (1996). Predatory pricing. Section on antitrust law, Monograph 22. Chicago: American Bar Association.
Hirschey, M. (2006). Fundamentals of managerial economics (8th ed.). Mason, OH: Thomson South western.
Johnson, A. M. (1959). Theodore Roosevelt and the bureau of corporations. The Mississippi Valley Historical Review, 25, 571-590.
Kavacic, W. E., & Shapiro, C. (2000). Antitrust policy: A century of economic thinking. Journal of Economic Perspectives, 14, 43-60.
ö Springer
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms

 Standard Oil and Predatory Pricing 265
Kerr, W . (2006). Dum ping: Trade policy in need of Economics, 54(1), 11-31.
Klevorick, A. K. (1993). The current state of the law and Industrial Organization, 83, 162-167.
Kolasky,W.(2010).ChiefjusticeEdwardDouglasWhite Summer 2010, 77-83.
Koller, R. H. (1971). The myth of predatory pricing: A Review, Summer, 4, 105-123.
Liebeier, W . J. (1986). W hither predatory pricing? Fro Law Review, 61, 1052-1098.
Liebowitz,S.J.,& Margolis,S.E.(2001).Winners,los Institute.
Lopatka, J. E., & Page, W . H. (2005). Econom ic auth cases. Cornell Law Review, 90, 617-703.
Lott, J. R., & Opler, T. C. (1996). Testing whether pr Journal of Business, 69(3), 339-382.
Mankiw, N. G. (2004). Principles of microeconomics McGee, J. (1958). Predatory price cutting: The Stand
ics, 1, 137-169.
McGee, J. (1980). Predatory pricing revisited. Journ
McPherson, J. M. (2003). Revisionist historians. AHA P
Milgrom, P., & John, R. (1992). Economics, organ NJ: Prentice Hall.
Milgrom, P. R., & Roberts, J. (1982a). Prédation, reputation and entry deterrence. Journal of Economic Theory, 27, 280-312.
Milgrom, P. R., & Roberts, J. (1982b). Limit pricing and entry under incomplete information. Eco nometrica, 50, 443^160.
Milgrom, P. R., & Roberts, J. (1990). New theories of predatory pricing. In G. Bonanno & D. Brandolini (Eds.), Industrial structure in the new economics. New York: Oxford Univer
sity Press.
Milgrom, P. R., & Roberts, J. (1992). Economic Organization and management. Saddle River, N. J.: Prentice Hall.
Nevins, A. (1941). John D. Rockefeller, the heroic age of American enterprise (Vol. I—II). New York: Scribner.
Nevins, A. (1953). Study in power: John D. Rockefeller, industrialist and philanthropist (Vol. I—II). New York: Scribner.
Nicholson, W. (2002). Microeconomic theory (8th ed.). Mason, OH: Thomson South-Western. Nicholson, W., & Snyder, C. (2007). Intermediate microeconomics and its application (10th ed.). Mason,
OH: Thomson South-Western.
O'Sullivan, A., Sheffrin, S. M., & Perez, S. J. (2008). Microeconomics: Principles, applications and tools (5th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
Parkin, M. (2005). Microeconomics (7th ed.). Boston: Pearson Addison Wesley.
Peltzman, S. (2005). Aaron director's influence on antitrust policy. Journal of Law and Econom
ics, 48, 313-330.
Pepall, L., Richards, D. J., & Norman, G. (2008). Industrial organization (4th ed.). Boston: Blackwell. Pierce, R. J., Jr. (2002). Is post-Chicago economics ready for the courtroom? A response to Professor
Brennan. The George Washington Law Review, 69, 1103-1125.
Posner, R. A. (1976). Antitrust law: An economic perspective. Chicago: University of Chicago Press. Scherer, F. M. (1970). Industrial market structure and economic performance. Chicago: Rand McNally. Scherer, F. M. (1980). Industrial market structure and economic performance. Chicago: Rand McNally. Scott Morton, F. (1997). Entry and prédation: British shipping cartels 1879-1929. Journal of Economics
and Management Strategy, 6, 679-724.
Shughart, W. F., II (1990). Organization of industry. Homewood, IL: Irwin.
Stigler, G. (1988). Memoirs of an unregulated economist. New York: Basic Books.
Stiglitz, J., & Walsh, C. (2002). Economics. New York: W. W. Norton & Company.
Tarbell, I. M. (1904). The history of the Standard Oil company (Vol. 2). New York: McClure, Phillips
& Company.
This content downloaded from 130.102.42.98 on Sun, 13 May 2018 21:18:54 UTC All use subject to http://about.jstor.org/terms
I Springer

 266 J. A. Dalton, L. Esposito
Tresch,R.W.(1994).Principlesofe USDepartmentofCommerce,Burea tions on the petroleum industry, Pa PartII-Pricesandprofits.Washing
USDepartmentofCommerce,Bure rations on the transport of petrol
G.P.O. Viscusi,W.K.,Vernon,J.M.,&Har
ed.).Cambridge,MA:MITPress. Weinberg,S.(2008).Takingonthet
York: W.W. Norton.
Winerman, M. (2003). The origins of the FTC: Concentration, cooperation, control and competition. Anti trust Law Journal, 71, 1-97.
Yamey, B. S. (1972). Predatory price cutting: Notes and comments. Journal of Law and Econom ics, 15, 129-142.
Yergin, D. (1991). The prize: The epic quest for oil, money and power. New York: Simon and Shuster. Zerbe, R. O., & Cooper, D. S. (1982). An empirical and theoretical analysis of alternative prédation
rules. Texas Law Review, 61, 655-715.
Zerbe, R. O., & Mumford, M. T. (1996). Does predatory pricing exist? Economic theory and the courts
after Brooke Group. The Antitrust Bulletin. 41, 949-985.
Legal Cases Cited
Advo, Inc. v. Philadelphia Newspapers, Inc. (1995). 51 F., 3rd Cir.
Barry Wright v. ITT Grinnel! Corp. (1983). 724 F., 1st Cir.
Brooke Group Ltd. v. Brown & Williamson Tobacco Corporation. (1993). 509 US. Matsushita Electric Industrial Corp., Ltd., et al. v. Zenith Radio Corp. et al. (1986). 475 US. Standard Oil Company of N.J., et al. (1911). v. US., 221 US. 1.
}}