COLLUSIVE ASPECTS OF COST REVELATION THROUGH ANTIDUMPING COMPLAINTS

When home and foreign duopolists do not know whether their rival is a high or low cost producer, they can use the GATT mandated investigatory procedure for dumping complaints to exchange information about costs. The home (foreign) firm's costs are disclosed through the injury (existence of dumping) decision of the investigation. High (low) cost firms benefit (are harmed) by the resolution of incomplete information about cost through the investigation. The sequence of the injury and existence of dumping decisions are demonstrated to affect the incentives of a home firm to complain about dumping and a foreign firm to engage in dumping.