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Alternative Effects of Antidumping Policy: Should Mexican Authorities be Worried?

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Author Info
Alfonso Mendieta () (School of Economic and Social Studies, University of East Anglia)
Abstract

Administered protection is not the only outcome of antidumping measures. This paper suggests a basic model of repeated interaction between a domestic and a foreign firm. Competing in prices in the importing market, antidumping action serves as the means to enforce and sustain tacit collusion between the firms. The main result is that price distortions by antidumping policy are a departure point for the achievement of the collusive outcome. Discount factors of future profits are altered relative to those observed under free trade, delaying domestic firm’s propensity to collude and prompting foreign firm’s.

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File URL: http://www.economiamexicana.cide.edu/num_anteriores/XIV-1/02_ALternative_effects.pdf
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Publisher Info
Article provided by in its journal Economia Mexicana NUEVA EPOCA.

Volume (Year): XIV (2005)
Issue (Month): 1 (January-June)
Pages: 41-69
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:emc:ecomex:v:14:y:2005:i:1:p:41-69

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Related research
Keywords: price competition; repeated interaction; tacit collusion; antidumping;

Find related papers by JEL classification:
D40 - Microeconomics - - Market Structure and Pricing - - - General
G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

References listed on IDEAS
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. Margaret Levenstein & Valerie Suslow & Lynda Oswald, 2003. "International Price-Fixing Cartels and Developing Countries: A Discussion of Effects and Policy Remedies," William Davidson Institute Working Papers Series 538, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  2. James A. Brander & Paul Krugman, 1983. "A 'Reciprocal Dumping' Model of International Trade," NBER Working Papers 1194, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Vandenbussche, Hylke & Veugelers, Reinhilde, 1996. "European Anti-dumping Policy and the Profitability of National and International Collusion," CEPR Discussion Papers 1469, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Fischer, Ronald D., 1992. "Endogenous probability of protection and firm behavior," Journal of International Economics, Elsevier, vol. 32(1-2), pages 149-163, February. [Downloadable!] (restricted)
  5. Prusa, Thomas J., 1992. "Why are so many antidumping petitions withdrawn?," Journal of International Economics, Elsevier, vol. 33(1-2), pages 1-20, August. [Downloadable!] (restricted)
  6. Feinberg, Robert M, 1989. "Exchange Rates and "Unfair Trade."," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 704-07, November. [Downloadable!] (restricted)
  7. Lynda Oswald & Valerie Suslow & Margaret Levenstein & Manuel Pastor, 2003. "International Price-Fixing Cartels and Developing Countries: A Discussion of Effects and Policy Remedies," Working Papers wp53, Political Economy Research Institute, University of Massachusetts at Amherst. [Downloadable!]
  8. Finger, J M & Hall, H Keith & Nelson, Douglas R, 1982. "The Political Economy of Administered Protection," American Economic Review, American Economic Association, vol. 72(3), pages 452-66, June. [Downloadable!] (restricted)
  9. Clarida, Richard H, 1993. "Entry, Dumping, and Shakeout," American Economic Review, American Economic Association, vol. 83(1), pages 180-202, March. [Downloadable!] (restricted)
  10. Maurizio Zanardi, 2000. "Antidumping Law as a Collusive Device," Boston College Working Papers in Economics 487, Boston College Department of Economics. [Downloadable!]
    Other versions:
  11. Margaret Levenstein & Valerie Suslow & Lynda Oswald, 2003. "International Price-Fixing Cartels and Developing Countries: A Discussion of Effects and Policy Remedies," NBER Working Papers 9511, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Knetter, Michael M. & Prusa, Thomas J., 2003. "Macroeconomic factors and antidumping filings: evidence from four countries," Journal of International Economics, Elsevier, vol. 61(1), pages 1-17, October. [Downloadable!] (restricted)
  13. Davies, Stephen W. & McGuinness, Anthony J., 1982. "Dumping at less than marginal cost," Journal of International Economics, Elsevier, vol. 12(1-2), pages 169-182, February. [Downloadable!] (restricted)
  14. Anderson, James E, 1992. "Domino Dumping, I: Competitive Exporters," American Economic Review, American Economic Association, vol. 82(1), pages 65-83, March. [Downloadable!] (restricted)
  15. Reitzes, James D, 1993. "Antidumping Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(4), pages 745-63, November. [Downloadable!] (restricted)
  16. Hartigan, James C., 1994. "Dumping and signaling," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 69-81, January. [Downloadable!] (restricted)
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