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Anti-Dumping Laws and Oligopolistic Trade

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Abstract

We 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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Suggested Citation

  • Jiang Bian & Gérard Gaudet, 1992. "Anti-Dumping Laws and Oligopolistic Trade," Cahiers de recherche du Département des sciences économiques, UQAM 9210, Université du Québec à Montréal, Département des sciences économiques.
  • Handle: RePEc:cre:uqamwp:9210
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    Cited by:

    1. Anderson, Simon P. & Schmitt, Nicolas & Thisse, Jacques-Francois, 1995. "Who benefits from antidumping legislation?," Journal of International Economics, Elsevier, vol. 38(3-4), pages 321-337, May.
    2. Nelson, Douglas, 2006. "The political economy of antidumping: A survey," European Journal of Political Economy, Elsevier, vol. 22(3), pages 554-590, September.
    3. Kaz Miyagiwa & Huasheng Song & Hylke Vandenbussche, 2016. "Accounting for Stylised Facts about Recent Anti-dumping: Retaliation and Innovation," The World Economy, Wiley Blackwell, vol. 39(2), pages 221-235, February.
    4. José Daniel Reyes, 2013. "Trade Liberalization and the Adoption of Antidumping Laws in Developing Countries," REVISTA EQUIDAD Y DESARROLLO, UNIVERSIDAD DE LA SALLE, December.
    5. Miyagiwa, Kaz & Song, Huasheng & Vandenbussche, Hylke, 2010. "Innovation, antidumping, and retaliation," CEPR Discussion Papers 7916, C.E.P.R. Discussion Papers.
    6. Miyagiwa, Kaz & Ohno, Yuka, 2007. "Dumping as a signal of innovation," Journal of International Economics, Elsevier, vol. 71(1), pages 221-240, March.

    More about this item

    JEL classification:

    • 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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