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Inefficient trade patterns: Excessive trade, cross-hauling and dumping
Authors:Benjamin Eden
Institution:Vanderbilt University and The University of Haifa, United States
Abstract:I study an example of a competitive environment in which trade occurs in a sequential manner. In this example, a country with a stable demand may suffer from trade with a country with unstable demand, there may be too much trade, a country may import and export the same good in the same period (cross-hauling) and dumping may occur. The timing of delivery is important. When delivery occurs before trade (delivery to stocks), trade improves welfare, there is dumping but no cross-hauling. When delivery occurs after trade (delivery to order), trade may reduce welfare and cross-hauling may occur.
Keywords:Demand uncertainty  Sequential trade  Cross-hauling  Dumping  Excessive trade
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