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

Bruce Blonigen and Jee-Hyeong Park

American Economic Review, 2004, vol. 94, issue 1, 134-154

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.

Date: 2004
Note: DOI: 10.1257/000282804322970742
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Working Paper: Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence (2003)
Working Paper: Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence (2001)
Working Paper: Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence (2001)
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