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Review of International Economics

Reciprocal Dumping with Product Differentiation

Tidskriftsartikel
Referens
Friberg, Richard och Mattias Ganslandt (2008). ”Reciprocal Dumping with Product Differentiation”. Review of International Economics 16(5), 942–954. doi.org/10.1111/j.1467-9396.2008.00758.x

Författare
Richard Friberg, Mattias Ganslandt

This paper examines if international trade can reduce total welfare in an international oligopoly with differentiated goods. We show that intra-industry trade, i.e. “reciprocal dumping,” can result in lower total surplus than autarky in a Cournot model for any degree of product differentiation. Moreover, trade can reduce welfare compared to autarky in a Bertrand model when the local markets are sufficiently competitive and products are sufficiently close substitutes. Otherwise it unambiguously increases welfare.