Universal Dumping of Homogeneous Products

Abstract

Contrary to predictions from traditional comparative advantage analysis, a class of models with imperfect competition predicts intraindustry trade in homogeneous goods. Brander and Krugman offer a model with two countries and one firm in each country which generates the outcome that both firms dump into the export market (reciprocal dumping). The present paper determines the extent to which higher dimensionality alters this outcome by introducing a model with several firms in each of several countries. It is shown that dumping is universal. Thus, whenever trade occurs dumping occurs.

Dumping in a Linder Model of Trade with Multiple Retail Channels

“…4. Contrast this to the reciprocal dumping, generated by oligopolistic interaction, of Brander and Krugman (1983), and the universal dumping model of Murray and Turdaliev (1999). Both of these models pertain to homogenous goods.…”

Disfavored Nations: Anti‐Dumping at the WTO

“…The advantages of invoking international shipping costs are that each firm has a larger share of its domestic market than it has of either of its export markets, and universal price dumping is always manifest (Murray and Kurdaliev, ) . We will suppose that the equilibrium depicted in – represents the reduced form of that process.…”

Dynamics and stability in retail competition

“…Applications of the Cournot scheme into the multi-market problem has been proposed before by economists, for example, in the case of international trade. Some of these works modeled the presence of economies of scale, for the domestic and foreign markets, considering the size (quantity produced) and other properties of firms [28][29][30][31][32][33][34][35]. Thus, for instance in a work of Krugman [30], a multi-market Cournot model with economies of scale was used to explain the successful performance of Japan as an exporting country at the beginning of the 1980s.…”