Optimal Strategies for International Expansion with and without Making Dumping
In this work, we consider an economic model in which one firm has the monopoly of a certain market in its own country and divides another market in a foreign country with a firm of the foreign country.
We study two possible strategies for the firm that is selling in both countries to increase its profit: the firm increases the production quantities to decrease the selling prices in both countries and avoid dumping; the firm only increases the production quantity to decrease the selling price in the foreign country and makes dumping. To do our analysis we use a duopoly model and we characterize the parameters that define the most profitable strategies
Alberto Pinto University of Porto, Portugal