Do Japanese auto manufacturers behave as short-run profit maximizers in the US market?
Does the pricing behaviour following a major vehicle restyling of Japanese manufacturers in the US market differ from that of domestic manufacturers over the 1977-92 period? While we found that domestic manufacturers increase price significantly on restyled models, we were unable to conclude that Japanese manufacturers did the same. In light of the demand and cost conditions developed, this pricing behaviour by Japanese manufacturers is difficult to reconcile with short-run profit maximization.
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