Antidumping, Social Quality of Goods and Smear Campaign

This article proposes to uncover another motivation behind the introduction of antidumping duties through the interaction between a Northern firm, a Southern one and an administering authority in charge of setting an antidumping procedure. The goods from the South are assumed to be ethically unsound while those from the North are ethically sound. Both firms compete on price in order to satisfy the demand of the North. We show that a smear campaign engaged by the domestic firm may influence the antidumping duty by reducing the credence of the consumers in the Southern good. Moreover it can discourage the foreign firm to actively cooperate in the antidumping investigation and this reaction of the Southern firm may increase the antidumping duty.