Do Anti-Dumping Rules Facilitate the Abuse of Market Dominance?

Martin Theuringer () and Pia Weiss ()

International Trade from EconWPA

Abstract: We discuss the effects of AD-protection in a standard Dixit model of entry deterrence. In an AD-regime, the newcomer is constrained by a minimum-price rule in addition to existing irreversible entrance costs. For minimum prices which lie below the Stackelberg one, we find that AD- rules distort competition. We show that AD-protection increases the advantages of entry deterrence for a wide range of combinations of sunk costs and minimum prices. When entrance costs are hight, consumer welfare is lower in an AD-regime than under free trade. Consequently, AD-protection facilitates the abuse of market dominance.

Keywords: anti-dumping; abuse of market dominance; strategic firm behaviour (search for similar items in EconPapers)
JEL-codes: F14 L40 (search for similar items in EconPapers)
Date: 2001-08-20
Note: Type of Document - Acrobat; prepared on Linux; to print on HP/PostScript; pages: 39 ; figures: included
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