Summar iz ing these developments with respect to the openly quoted joint 1 ist pr ice system, Ima i (9, p. 39) has stated: 69/ -Lower Japa...
Summar iz ing these developments with respect to the openly quoted joint 1 ist pr ice system, Ima i (9, p. 39) has stated: 69/ -Lower Japan Final Quarter,- Metal Bulletin, Oct. 10, 1975, p: 391 -Output Down and Costs Up,- Metal Bulletin, Dec. 5, 1975, p. 401 see, also, the: metals section in various issues of the Japan Econom ic Journal dur ing this per iod. 70/ If a recession cartel is approved, the participants set up a conference which eStablishes quota allocations among members and monitors the agreement. Quotas are generally al located on the bas is of past manufactur ing and sales vol ume. The participants must ,submit to the conference actual monthly manufactur ing and sal~s data along with suppor t ing documents 1 the conference is empqwered to impose penalties on firms which violate the quota. I -215- From 1960 on, when major steelmakers began lower ing actual pr ices by offer ing rebates and nonmembers of the cartel continued to increase their market shares, the kohan prices gradually became unenforceable. . . . IT)
he system gradually lost its force and turned into a price reporting system. Recently, partly as a result of the antimonopoly laws, the kohan system has ceased functioning even as a pr ice reporting system. For a systematic treatment of cycl~caI pricing in Japan, table 4.17 presents data obtained from Metal Bulletin on steel pr ices in Japan. These pr ices are Metal Bulletin's assessment of small merchants' buying prices. One observes that compared with the associated trough, prices rose during the booms of 1973-74, 1969 and early 1970, and 1967. Metal Bulletin began publishing its assessment of Japanese small merchants' prices in 1965 ¡ the data in table 4.15 for 1961-64 are -market pr ices. in Tokyo reflecting exchanges between trading companies and service centers. Table 4.16 presents the Bank of Japan indexes of iron and steel prices and all prices of wholesale commodities. The Bank of Japan index reflects both the JOSP and the market prices. Thus it exhibits less' price flexibility than actual prices. Table 4.17 presents domestic unit value data of five steel products. Both the Bank of Japan index and the unit value data 'reveal a slight decline in steel pr ices within Japan from 1961 to 1972.
It appears that list prices in Japan, as measured by the JOSP, are extremely inflexible. However, the evidence reveals that transactions prices vary cyclically. III. INTERNATIONAL DIFFERENCES IN THE PRICING POLICIES OF THE MAJOR PRODUCING NATIONS Cyclical Pricing This study has concluded that with respect to domestic pr ices all the major produc ing nat ions have 1 i st pr ices tha t .-.- . could be characterized as .administered.~ However, the domestic transactions prices have moved in a cyclical manner in all of. the nations studied. Thus, with respect to domestic cyclical pricing, one finds that the pricing policies of the steel industries in the major producing nations are similar: actual prices are responsive to demand while list prices are not. 71/ Comparisons of Domestic Prices ' Table 4.18 presents data on the domestic prices of bars, plates, and cold rolled sheets in the U.S., EC, and Japan. 72/ Throughout the 1960' s the prices were highest in the United States. From 1968 unti 1 1972, the Japanese pr ices were the "''" :_-J 71/ It should be emphasized that cyclically flexible pricing does not necessarily ,imply competitive pricing, since profit maximizing pricing bY'monopolists and oligopolists will generally lead to flexible pricing. For theoretical and empirical discussions of this matter see, respectively, (26, p. 305) and P. David Qualls, "Market Structure and Price-Cost Margin Flexibility in American Manufacturing, 1958-70,. Bureau of Economics Work~g Paper Number 1, WaShington, D.C.: Federal Trade Commission, 1977. .~~ 72/ All of these prices, except the Japanese for the 1970's, Me unit values; Le.,1 they are the average values of all actual transactions in the product line for the years.
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