Anti-dumping Laws and Oligopolistic Trade
AbstractWe study the effect of anti-dumping laws in a differentiated products quanti - ty-setting oligopoly. Dumping may or may not occur in the model and may or may not be reciprocal. We show that the effect of adopting an anti-dumping policy on the welfare of the importing country is ambiguous. It can even lead to an increase in the consumers’ surplus in the importing country. Hence the importing country may in some cases find strong reasons for the adoption of an anti-dumping policy. We then study the endogenous determination of the equi - librium anti-dumping policies in a two-stage game with reciprocal dumping in which the two governments simultaneously choose anti-dumping policies in a first stage. We provide a suf ficient condition, relating the degree of substi - tutability in demand between the two goods and transport cost, in order for each country to have an incentive to deviate unilaterally from free trade in the presence of anti-dumping laws. We show that governments acting cooperatively to maximize world welfare should choose to endorse the institution of antidumping laws.
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Bibliographic InfoArticle provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.
Volume (Year): 12 (1997)
Issue (Month): ()
Other versions of this item:
- Jiang Bian & Gérard Gaudet, 1992. "Anti-Dumping Laws and Oligopolistic Trade," Cahiers de recherche du DÃ©partement des sciences Ã©conomiques, UQAM 9210, Université du Québec à Montréal, Département des sciences économiques.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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