Alternative Effects of Antidumping Policy: Should Mexican Authorities be Worried?

Alfonso Mendieta ()
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Alfonso Mendieta: School of Economic and Social Studies, University of East Anglia

Economía Mexicana NUEVA ÉPOCA, 2005, vol. XIV, issue 1, 41-69

Abstract: Administered protection is not the only outcome of antidumping measures. This paper suggests a basic model of repeated interaction between a domestic and a foreign firm. Competing in prices in the importing market, antidumping action serves as the means to enforce and sustain tacit collusion between the firms. The main result is that price distortions by antidumping policy are a departure point for the achievement of the collusive outcome. Discount factors of future profits are altered relative to those observed under free trade, delaying domestic firm’s propensity to collude and prompting foreign firm’s.

Keywords: price competition; repeated interaction; tacit collusion; antidumping (search for similar items in EconPapers)
JEL-codes: D40 G18 (search for similar items in EconPapers)
Date: 2005
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