Game Analysis of Implementing Price Undertaking Agreements in Anti-dumping Disputes

The Price Undertaking Agreement is one of the strategies a company accused of dumping often adopts in dealing with anti-dumping disputes. Using static game analysis, this paper compares the impact that anti-dumping duties and price undertaking agreements may have on an importing country's social welfare and an accused company's market performance. We conclude that, compared with anti-dumping duties, price undertakings improve the importing country's social welfare and reduce the accused company's market share in the import country. We also note that, in addition to the financial benefit, price undertakings can prevent escalation of trade disputes in international trade negotiations.