Market share, cost-based dumping, and anti-dumping policy

Thusnelda Tivig and Uwe Walz ()

Canadian Journal of Economics, 2000, vol. 33, issue 1, 69-86

Abstract: This paper studies the occurrence of dumping and the implications of anti-dumping duties in a deterministic price-setting two-period duopoly model for differentiated products. When current market shares matter for future demand, cost-based dumping can be profitable. Dumping thus arises as a form of investment in market shares. This might trigger the application of anti-dumping law. We further show that correctly anticipated duties do not necessarily hinder firms from selling below costs. The mere existence of anti-dumping law, however, significantly changes the structure of the game, leading to higher first-period prices for both firms.

JEL-codes: F12 F13 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (9)

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