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- W3124842900 abstract "Since price discrimination and selling below cost arise in the normal course of business and are usually legal for domestic rms, countering these practices by foreign rms provides a very weak rationale for antidumping duties. If antidumping duties were to provide a systematic defense against predation by foreign rms, however, a strong fair-trade justication would remain. This paper adapts the classic entry-deterrence analysis of Dixit (1979) and Brander and Spencer (1981) to provide a simple treatment of predation, which is applicable with price leadership as well as quantity leadership. Although situations of cross-border predation appear to be quite rare, foreign rms may sometimes nd themselves in leadership positions if they have to make shipments and/or set prices before their domestic rivals. This paper shows that, in the context of such an international leadership game, predation may occur without dumping and visa versa. Further, when dumping and predation do coexist, a sophisticated form of anti-dumping duty would prevent predation, but the simple anti-dumping duties that are generally observed in practice will often be insucient. Consequently, the paper challenges the fair-trade view of antidumping policy as an antidote for predation and strengthens the foundation of the counter-argument that antidumping constitutes a new insidious form of protectionism and trade harassment, which is of particularly serious concerns for small countries." @default.
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- W3124842900 date "2008-01-01" @default.
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- W3124842900 title "Are antidumping duties an antidote for predation" @default.
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