Do Anti-Dumping Rules Facilitate the Abuse of Market Dominance?
AbstractWe discuss the effects of AD-protection in a standard Dixit model of entry deterrence. In an AD-regime, the newcomer is constrained by a minimum-price rule in addition to existing irreversible entrance costs. For minimum prices which lie below the Stackelberg one, we find that AD- rules distort competition. We show that AD-protection increases the advantages of entry deterrence for a wide range of combinations of sunk costs and minimum prices. When entrance costs are hight, consumer welfare is lower in an AD-regime than under free trade. Consequently, AD-protection facilitates the abuse of market dominance.
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Bibliographic InfoPaper provided by EconWPA in its series International Trade with number 0108002.
Length: 39 pages
Date of creation: 20 Aug 2001
Date of revision:
Note: Type of Document - Acrobat; prepared on Linux; to print on HP/PostScript; pages: 39 ; figures: included
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anti-dumping; abuse of market dominance; strategic firm behaviour;
Other versions of this item:
- Martin Theuringer & Pia Weiß, 2001. "Do Anti-Dumping Rules Facilitate the Abuse of Market Dominance?," IWP Discussion Paper Series 03/2001, Institute for Economic Policy, Cologne, Germany.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-08-30 (All new papers)
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