Market share, cost-based dumping, and anti-dumping policy
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.Download Info
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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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Related research
Keywords:Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Nelson, Douglas, 2006. "The political economy of antidumping: A survey," European Journal of Political Economy, Elsevier, vol. 22(3), pages 554-590, September.
- Shibayama, Chisato & Ishii, Yasunori, 2008. "Multiproduct firms and dumping," ãã¸ãã¹åµé ã»ã³ã¿ã¼ãã£ã¹ã«ãã·ã§ã³ã»ãã¼ãã¼ (Discussion papers of the Center for Business Creation) 10252/1026, Otaru University of Commerce.
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