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

Bruce A. Blonigen, Jee-Hyeong Park

NBER Working Paper No. 8477
Issued in September 2001
NBER Program(s):International Trade and Investment

Antidumping (AD) duties are calculated as the difference between the foreign firm's product price in the export market and some definition of 'normal' or 'fair' value, often the foreign firm's product price in its own market. Additionally, AD laws allow for recalculation of these AD duties over time in what are known as administrative reviews. This paper examines for the first time the resulting dynamic pricing problem of a foreign firm that faces such an AD trade protection policy in its export market. When AD duties are certain for any dumping that occurs, we obtain the surprising result that dumping and AD duties should increase over time toward a stationary equilibrium value. Adding uncertainties prevalent in AD enforcement into our analysis changes these conclusions substantially and leads to more realistic testable implications. Firms with ex ante expectations that the probability of AD enforcement is low, or with expectations that the probability of a termination/VER (instead of AD duties) is high, will decrease their dumping and AD duties over time in the administrative review process once they face AD duties. Using detailed data from U.S. AD investigations filed from 1980-1995, we find evidence consistent with these hypotheses stemming from our analysis with uncertain AD enforcement and provide empirical evidence consistent with James Anderson's domino dumping hypothesis.

download in pdf format
   (424 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8477

Published: Blonigen, Bruce A. and Jee-Hyeong Park. "Dynamic Pricing In The Presence Of Antidumping Policy: Theory And Evidence," American Economic Review, 2004, v94(1,Mar), 134-154. citation courtesy of

Users who downloaded this paper also downloaded* these:
Blonigen w10783 Working the System: Firm Learning and the Antidumping Process
Blonigen w7776 Tariff-Jumping Antidumping Duties
Prusa w5440 The Trade Effects of U.S. Antidumping Actions
Blonigen and Bown w8576 Antidumping and Retaliation Threats
Knetter and Prusa w8010 Macroeconomic Factors and Antidumping Filings: Evidence from Four Countries
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us