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The effects of antidumping legislation on the degree of product variety and social welfare

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  • Joaquín Andaluz

    () (University of Zaragoza, Departamento de Análisis Económico, Facultad de Ciencias Económicas y Empresariales, Gran Vía 2, 50005 Zaragoza, Spain)

Abstract

Using a simple characteristic space model of monopolistic competition with two interdependent markets, this paper analyses the effects of the bilateral adoption of antidumping measures on the degree of product differentiation, as well as the relationships with the type of product arrangement and the implications for welfare. Under an arrangement where each domestic firm competes directly with two imported products (interleaved arrangement), the model reproduces some of the results that already exist in the literature, where these have been obtained in an oligopolistic context. Through the characterisation of the symmetric zero profit equilibrium, it is shown that under such an arrangement the degree of product variety is higher when governments do not impose bilateral restrictions on prices. By contrast, under an arrangement where each half of the market is made-up of products of the same nationality (split arrangement), the reciprocal imposition of antidumping legislation has no effect on either the degree of product variety or on social welfare.

Suggested Citation

  • Joaquín Andaluz, 2001. "The effects of antidumping legislation on the degree of product variety and social welfare," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 35(4), pages 561-575.
  • Handle: RePEc:spr:anresc:v:35:y:2001:i:4:p:561-575
    Note: Received: March 2000/Accepted: May 2001
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    More about this item

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • 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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