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Title:Do anti-dumping rules facilitate the abuse of market dominance? PDF Logo
Authors:Theuringer, Martin
Weiss, Pia
Issue Date:2001
Series/Report no.:IWP Discussion Paper 2001/3
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.
Subjects:Anti-dumping
abuse of market dominance
strategic firm behaviour
JEL:F14
L40
Document Type:Working Paper
Appears in Collections:iwp Discussion Papers, Institut für Wirtschaftspolitik, Universität Köln

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