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  3. American Economic Review
  4. March 2004
  5. Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence

  • Bruce A. Blonigen
  • Jee-Hyeong Park
American Economic Review
vol. 94, no. 1, March 2004
(pp. 134–154)
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Abstract

Antidumping (AD) trade protection policies allow government agencies to recalculate AD duties based on foreign firms' most recent pricing behavior. We examine the resulting dynamic pricing problem of a foreign firm facing such policy. We show that the expected pattern of AD duty recalculations over time crucially depends on the foreign firm's ex ante expectations of possible outcomes of AD policy enforcement. Our empirical analysis then confirms the role of ex ante expectations in explaining observed patterns of AD recalculations. Many of our model's results are applicable to other situations where enforcement of policy is tied to the subject's behavior.

Citation

Blonigen, Bruce, A., and Jee-Hyeong Park. 2004. "Dynamic Pricing in the Presence of Antidumping Policy: Theory and Evidence." American Economic Review, 94 (1): 134–154. DOI: 10.1257/000282804322970742

JEL Classification

  • D25 Intertemporal Firm Choice: Investment, Capacity, and Financing
  • F13 Trade Policy; International Trade Organizations
  • F23 Multinational Firms; International Business
  • L11 Production, Pricing, and Market Structure; Size Distribution of Firms