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Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence

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  • Bruce A. Blonigen
  • Jee-Hyeong Park

Abstract

Antidumping (AD) trade protection policies allow government agencies to recalculate AD duties based on foreign firms' most recent pricing behavior. We examine the resulting dynamic pricing problem of a foreign firm facing such policy. We show that the expected pattern of AD duty recalculations over time crucially depends on the foreign firm's ex ante expectations of possible outcomes of AD policy enforcement. Our empirical analysis then confirms the role of ex ante expectations in explaining observed patterns of AD recalculations. Many of our model's results are applicable to other situations where enforcement of policy is tied to the subject's behavior.

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 94 (2004)
Issue (Month): 1 (March)
Pages: 134-154

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Handle: RePEc:aea:aecrev:v:94:y:2004:i:1:p:134-154

Note: DOI: 10.1257/000282804322970742
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  6. Bruce A. Blonigen & Jee-Hyeong Park, 2000. "Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence," University of Oregon Economics Department Working Papers 2001-1, University of Oregon Economics Department, revised 01 Jul 2001.
  7. Anderson, James E., 1993. "Domino dumping II: Anti-dumping," Journal of International Economics, Elsevier, vol. 35(1-2), pages 133-150, August.
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