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

Bruce A. Blonigen () and Park, Jee-Hyeong ()
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Bruce A. Blonigen: Department of Economics, University of Oregon and NBER
Park, Jee-Hyeong: Department of Economics, Wayne State University

University of Oregon Economics Department Working Papers from University of Oregon Economics Department

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.

JEL-codes: F13 L11 (search for similar items in EconPapers)
Date: 2000-03-01, Revised 2003-06-01
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Persistent link: http://EconPapers.repec.org/RePEc:ore:uoecwp:2003-22

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