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Do Anti-Dumping Rules Facilitate the Abuse of Market Dominance?

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  • Martin Theuringer
  • Pia Weiß

Abstract

We discuss the effects of AD-protection in a standard Dixit model of entry deterrence. In an AD-regime, the newcomer is constrained by a minimum-price rule in addition to existing irreversible entrance costs. For minimum prices which lie below the Stackelberg one, we find that AD-rules distort competition. We show that AD-protection increases the advantages of entry deterrence for a wide range of combinations of sunk costs and minimum prices. When entrance costs are high, consumer welfare is lower in an AD-regime than under free trade. Consequently, AD-protection facilitates the abuse of market dominance.

Suggested Citation

  • Martin Theuringer & Pia Weiß, 2001. "Do Anti-Dumping Rules Facilitate the Abuse of Market Dominance?," IWP Discussion Paper Series 03/2001, Institute for Economic Policy, Cologne, Germany.
    • Handle: RePEc:kln:iwpdip:dp03/01
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    References listed on IDEAS

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    Cited by:

    1. Kathy Baylis & Jeffrey M. Perloff, 2010. "Trade diversion from tomato suspension agreements," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(1), pages 127-151, February.
    2. Jens Metge & Pia Weiss, 2011. "Protecting The Domestic Market: Industrial Policy And Strategic Firm Behavior," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 56(02), pages 159-174.

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    More about this item

    Keywords

    Anti-dumping; abuse of market dominance; strategic firm behaviour;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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