Antidumping as Strategic Trade Policy Under Asymmetric Information
AbstractThis paper investigates the domestic government’s antidumping duty choice in an asymmetric information framework where the foreign firm’s cost is observed by the domestic firm, but not by the government. To induce truthful revelation, the government can design a tariff schedule, contingent on firms’ cost reports, accompanied by a threat of auditing and implementing penalty duties. We show that the antidumping framework within GATT/WTO may not only offer the means to pursue strategic trade policy disguised as fair trade policy, but may also help overcome the informational problems with regard to determining the optimal strategic trade policy.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2536.
Date of creation: 2009
Date of revision:
antidumping duties; asymmetric information; trade protection; strategic trade policy;
Other versions of this item:
- Xenia Matschke & Anja Schottner, 2008. "Antidumping as Strategic Trade Policy Under Asymmetric Information," Working papers 2008-19, University of Connecticut, Department of Economics, revised Jan 2010.
- 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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