Antidumping Regulations: Anti‐Competitive and Anti‐Export |
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| Authors: | David R Collie Vo Phuong Mai Le |
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| Institution: | 1. Cardiff Business School, Cardiff University, UK;2. We thank Roger Clarke for his detailed comments on an earlier draft, and participants at the European Association for Research in Industrial Economics (EARIE) conference at the University of Ljubljana, Slovenia, in September 2009 for their comments. |
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| Abstract: | In a Bertrand duopoly model, it is shown that an antidumping regulation can be strategically exploited by the home firm to reduce the degree of competition in the home market. The home firm commits not to export to the foreign market which gives the foreign firm a monopoly in its own market. As a result the foreign firm will increase its price allowing the home firm to increase its price and its profits. If the products are sufficiently close substitutes then the higher profits in the home market are large enough to compensate for the loss of profits on exports. |
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