JAPANESE ANTITRUST - RECONCILING THEORY AND EVIDENCE

Japanese antitrust law exempts a variety of vertical and horizontal re straints that remain closely regulated in the United States. Despite t hese dissimilar antitrust environments, however, market concentration, firms' exercise of market power, and dead-weight loss from monopoly a re highly similar in the two countries. The hypothesis that antitrust alters the relative mix of price to non-price competition rather than the absolute level that competition assumes might explain this empiric al puzzle. Thus, this paper studies Japanese antitrust exemptions for resale price maintenance and export cartel associations to illustrate how adopting vertical and horizontal restraints has allowed Japanese f irms to substitute towards forms of non-price competition better tailo red to industry characteristics.