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Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence

Author

Listed:
  • Bruce A. Blonigen

    (Department of Economics, University of Oregon and NBER)

  • Jee-Hyeong Park

    (Department of Economics, Wayne State University)

Abstract

Antidumping (AD) trade protection policies allow government agencies to recalculate AD duties based on foreign firms’ most recent pricing behavior. We examine the resulting dynamic pricing problem of a foreign firm facing such policy. We show that the expected pattern of AD duty recalculations over time crucially depends on the foreign firm’s ex ante expectations of possible outcomes of AD policy enforcement. Our empirical analysis then confirms the role of ex ante expectations in explaining observed patterns of AD recalculations. Many of our model’s results are applicable to other situations where enforcement of policy is tied to the subject’s behavior.

Suggested Citation

  • Bruce A. Blonigen & Jee-Hyeong Park, 2000. "Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence," University of Oregon Economics Department Working Papers 2003-22, University of Oregon Economics Department, revised 01 Jun 2003.
    • Handle: RePEc:ore:uoecwp:2003-22
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    File URL: http://economics.uoregon.edu/papers/UO-2003-22_Blonigen_Park_Dynamic_Pricing.pdf
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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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