Using very low prices to undercut competition and then later raising prices only works where there is some way to lock customers in. Japanese companies do it al

Using very low prices to undercut competition and then later raising prices only works where there is some way to lock customers in. Japanese companies do it all the time (they have exclusive contracts to provide lock-in). This is extremely common in game consoles because the dominant console will have the most games which will tend to make it stay as the dominant console. In general, anything with high switching costs can make use of this. (Phone and cable companies also used to do this). I would argue that these kind of monopolistic practices are bad for the economy but should only be dealt with after it can be proven that a monopoly exists. Thats because government stifling of beneficial businesses is a far bigger danger than monopolies.