A "Signal-Jamming" Theory of Predation

Abstract

We propose a new theory of predation based on "signal-jamming." In our model the predator's characteristics are common knowledge, while the entrant is uncertain of his own future profitability. The entrant uses his current profit to decide whether to remain in the market, and the predator preys to "jam" or interfere with this inference problem. Thus, our model differs from those based on "reputation effects, " in which the predator preys to signal information about himself.