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Anti-dumping measures as a tool of protectionism: A mechanism design approach

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Author Info
Leonard K. Cheng
Larry D. Qiu
Kit Pong Wong

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Abstract

In this paper we explore the design of optimal incentive-compatible anti-dumping (AD) measures. When the weight given to the domestic firm's profit in the government's objective function is relatively small, it is shown that no AD duty should be imposed if the foreign firm reports its own costs, but a constant AD duty should be imposed if the domestic firm reports the foreign firm's cost. When this weight is large, in either case of reporting the AD duty is a prohibitive tariff. The optimal AD measures are modified in the presence of a GATT/WTO constraint.

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File URL: http://economics.ca/cgi/xms?jab=v34n3/03.pdf
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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 34 (2001)
Issue (Month): 3 (August)
Pages: 639-660
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Handle: RePEc:cje:issued:v:34:y:2001:i:3:p:639-660

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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

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Huasheng Song & Hylke Vandenbussche, 2008. "Trade Policy and Innovation," LICOS Discussion Papers 20008, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  2. Matloob Piracha, 2004. "Export Subsidies and Countervailing Duties Under Asymmetric Information," Studies in Economics 0410, Department of Economics, University of Kent. [Downloadable!]
  3. Xenia Matschke & Anja Schöttner, 2009. "Antidumping as Strategic Trade Policy Under Asymmetric Information," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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