IDEAS home Printed from https://ideas.repec.org/p/uct/uconnp/2007-39.html
   My bibliography  Save this paper

Antidumping Duties Under Asymmetric Cost Information

Author

Listed:
  • Xenia Matschke

    (University of Connecticut)

  • Anja Schottner

    (University of Bonn)

Abstract

In the last two decades, trade liberalization under GATT/WTO has been partly offset by an increase in antidumping protection due to the inclusion of sales below cost in the definition of dumping. The cost-based definition gives regulating authorities an opportunity to choose protection according to their liking. This paper investigates the domestic government's antidumping duty choice in an asymmetric information framework where the foreign firm's cost is observed by the domestic firm, but not by the government. To induce truthful revelation, the government can design a tariff schedule, contingent on firms' cost reports, accompanied by a threat to collect additional information for report verification (i.e., auditing) and, in case misreporting is detected, to set penalty duties. We devise a mechanism where the domestic and foreign firm may be asked to provide cost reports under which the full-information, i.e., efficient, tariffs are implementable. We also discuss the conditions under which this policy is optimal and when it may be better to instead adopt a "facts available" policy, i.e., a policy where no information from the foreign firm is solicited.

Suggested Citation

  • Xenia Matschke & Anja Schottner, 2007. "Antidumping Duties Under Asymmetric Cost Information," Working papers 2007-39, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2007-39
    as

    Download full text from publisher

    File URL: http://web2.uconn.edu/economics/working/2007-39.pdf
    File Function: Full text
    Download Restriction: no

    More about this item

    Keywords

    antidumping duties; asymmetric information; trade protection;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uct:uconnp:2007-39. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark McConnel). General contact details of provider: http://edirc.repec.org/data/deuctus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.