Design of an Antidumping Rule with Incomplete Information about Material Injury
AbstractThis paper deals with the inability of an administering authority to directly observe the level of material injury in antidumping petitions. We focus on the use, by the domestic firm, of private information about injury in order to obtain higher protection. By using an incentive framework, we show that asym - metric information about the level of injury can be resolved by using a mix of lump-sum compensation, domestic unit taxes and antidumping duties rather than just import duties. Surprisingly, the lump-sum transfer decreases and the domestic unit tax increases with the level of material injury. This efficient antidumping rule will induce the domestic firm to tell the truth about the level of material injury.
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Bibliographic InfoArticle provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.
Volume (Year): 13 (1998)
Issue (Month): ()
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
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