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Market share, cost-based dumping, and anti-dumping policy

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Author Info

  • Thusnelda Tivig
  • Uwe Walz

Abstract

This paper studies the occurrence of dumping and the implications of anti-dumping duties in a deterministic price-setting two-period duopoly model for differentiated products. When current market shares matter for future demand, cost-based dumping can be profitable. Dumping thus arises as a form of investment in market shares. This might trigger the application of anti-dumping law. We further show that correctly anticipated duties do not necessarily hinder firms from selling below costs. The mere existence of anti-dumping law, however, significantly changes the structure of the game, leading to higher first-period prices for both firms.

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Bibliographic Info

Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 33 (2000)
Issue (Month): 1 (February)
Pages: 69-86

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Handle: RePEc:cje:issued:v:33:y:2000:i:1:p:69-86

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Cited by:
  1. Shibayama, Chisato & Ishii, Yasunori, 2008. "Multiproduct firms and dumping," ビジネス創造センターディスカッション・ペーパー (Discussion papers of the Center for Business Creation) 10252/1026, Otaru University of Commerce.
  2. Nelson, Douglas, 2006. "The political economy of antidumping: A survey," European Journal of Political Economy, Elsevier, vol. 22(3), pages 554-590, September.
  3. Bagchi, Sagnik & Bhattacharyya, Surajit & Narayanan, Krishnan, 2014. "Does Anti-dumping Enforcement Generate Threat?," MPRA Paper 53627, University Library of Munich, Germany.

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