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A Welfare Evaluation of Anti-Dumping Rules

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  • Shy, O.

Abstract

The paper constructs a general equilibrium environment where firms find it profitable to set low prices abroad in order to 'dump' their products overseas. The paper conducts a welfare evaluation of implementing anti-dumping policies for two common interpretations of dumping activities: pricing below the cost of production and pricing abroad lower than at home. The major findings are: (a) in a world economy where firms play a price game in all markets, the anti-cost dumping policy is superior to the antiprice dumping policy for generating a welfare improvement for the injured country. (b) There is a special case where the imposition of anti-dumping rules can be welfare improving in all countries.
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Suggested Citation

  • Shy, O., 1992. "A Welfare Evaluation of Anti-Dumping Rules," Papers 8-92, Tel Aviv.
    • Handle: RePEc:fth:teavfo:8-92
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