Toward a Dialogistic Competition Policy
Akihiko NAKAGAWNIntroduction
I. Understanding Others Who Disagree with Us
A. Theory-Ladenness and Different Underlying Theories
I. Articulated Underlying Theories
2. Discovering Underlying Theories
B. Motivated Reasoning and Confirmation Bias
I. Different Facets of Psychological Influence
2. Limitations and Caveats
II. Selectivity oflnformation Processing
A. Problematic Selectivity
B. Selectivity Installed in Each Discipline
III. Beyond Consumer Welfare
A. Limitations of Both Standards
B. Manipulating Policy Preference as Dialogue Support
Conclusion

1 Associate Professor of Law, Hokkaido University Graduate School of Law.

This essay is based on my presentation at the Conference on "Establishing a New
Global Law and Policy for Multi-Agential Governance'' in Hokkaido University
on Nov. 25, 2012. I thank Bruce Lyons and Noboru Kawahama for valuablecomments on my presentation and the draft. I am especially grateful to Bruce
Lyons, Ioannis Lianos, and Daniel Sokol, as well as Yoshiyuki Tamura and Hiroo
Sono for making an extraordinary symposium possible. I also thank Takeshi
Fujitani, Hisashi Aizawa, and Ryoko Oki for frank and insightful discussions.
This research was supported by JSPS KAKENHI 22730043.

Introduction
The Japanese Antimonopoly Act, which was modeled on the U.S. antitrust laws, has collected over 60 years of experience. The fact that ourlaw was influenced by the U.S. antitrust laws in its initial transplant does
not ensure that it has developed as impressively as its origin. Institutional
differences between nations, stages of economic development, and otherfactors shape and influence how different jurisdictions develop their law
over time. This paper focuses on a specific element that discourages thedevelopment of the antimonopoly policy in Japan: the poor mutual understanding and diversity-averse "dialogue" within the antitrust community, which includes economists and lawyers?
Disagreement arises in any legal disputes or policy debates. Disagreement has its own merits. There is no progress without criticism.
However, the current exchanges of opinions surrounding the Japanese
antimonopoly law are not productive debates: they preach one view but
ignore others. Such random throws guide us nowhere. 3 Even in the best
Throughout this paper, I use the words "competition law/policy" and "antitrust
law/policy" interchangeably, and will only use "antimonopoly law/policy" when I
wish to limit my argument to the context specific to the Japanese law.
3 Disagreement could tum to hostility, which distorts productive discussions
between sincere minds. When we perceive others who disagree with us as biased,
the preference for an aggressive response is increased. See Kathleen Kennedy &Emily Pronin, When Disagreement Gets Ugly: Perceptions of Bias and the Escalation of Conflict, 34 Pers. Soc. Psycho!. Bull. 833 (2008). This perception ofbias is asymmetric, in that we perceive dissenters as biased but perceive ourselves as objective. Asymmetric perception is mediated by naive realism, introspection illusion, and self-enhancement. See Emily Pronin, Perception and Misperception of Bias in Human Judgment, 11 Trends Cogn. Sci. 37 (2006).
Hostility can ultimately tum members of minorities into activists, who eschew deliberation with people wielding power or with people who they believe
will perpetuate structural injustice. Instead, activists take other actions that theyfind more effective in conveying their criticism, such as picketing, leafleting, andboycotts. See Iris Young, Activist Challenges to Deliberative Democracy, 29 Polit.
Theory 670, 673 (2001 ). As Young argues, "processes of engaged and responsible
2

172

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Toward a Dialogistic Competition Policy (Nakagawa)networks, I personally have experienced this type of poor communication
and bad dialogue between professors of law and professors of economics.
My aim in this paper is twofold. First, I will specify the ways inwhich we can better understand others who disagree with us on the same
issue or the same piece of information. If we speak with someone who
has a different theory from ours, it is difficult to understand what she or
he says without knowing her or his underlying theory. If we do not understand what the other person says, his or her opinion is easily neglected
and the exchange of opinions will stop, thus undermining further debate
and interaction; this is particularly damaging for academic progress.
Though this answer may be intuitive, there is a structural problem installed in our perceptions and reasoning. Different people sometimes
generate different hypotheses from the same set of information. Throughselective information processing, people sometimes examine hypotheses
inadequately. Secondly, focusing on the dialogue between antitrust lawyers and economists, I will suggest an interpretative manipulation thatwould make it easier for them to engage in a more interactive dialogue4
despite disciplinary differences.
The types of disagreement this paper covers are those between the
majority and the dissenting judges in a judicial panel, between lawyers
and economists, between a competition agency and the reviewing courts,
and between majority and minority scholars. On the other hand, I will not
discuss disagreements between the legislature and other branches, bedemocratic communication include street demonstrations and sit-ins ... " Id. at
688.
4 I define an interactive dialogue as one which advances the accumulated
knowledge for at least some participants through the exchange of diverse andnew opinions. In other words, a dialogue that improves the knowledge of someparticipants will qualify as interactive. New opinions include new learning forsome members (e.g., for people from different disciplines) and may not have tobe historically novel. This definition may diverge from common notions because
it only requires a one-way influence and an improvement of the knowledge as awhole. However, a mutually improving dialogue is too restrictive to be expectedin practice.

cause legislative acts are not fully analyzed in the framework developedin this essay. 5 In other words, topics of antitrust enforcement such as
sanctions and institutional design are largely out of my focus, because
legislatures have much more to say about these topics than about substantive standards, on which they need expertise to advocate legislativechange.
Part I introduces a framework for understanding the processes of legal decision making. Based on the well-known concept of"theory-laden"
and related psychological studies on motivated reasoning and confirmation bias, I will sketch a psychological framework to explore how different people reason differently even when they face the same set of information. Part II extends the analysis of these psychological mechanisms,
by clarifying their common character and by describing the most intractable kind of disagreements. Given that different ways of selective information processing are used in different disciplines, Part III proposes amethod to encourage a more interactive dialogue when we see interdisciplinary disagreements between lawyers and economists.

I. Understanding Others Who Disagree with Us
Suppose you are uncomfortable with a specific Competition Authority's decision, a judgment of an antitrust court, commentators' criticism ofa decision with which you agree, or commentators' endorsement of a
specific conclusion with which you disagree. How could you better understand the opinions of others who disagree with you? Better understanding here does not mean that you would change your mind, but itmeans that you would realize where they diverged from your reasoning.

5 Decision making processes in the legislature are affected by confounding factors other than inter-branch disagreements, and therefore need different kinds ofmaterials if their mechanisms are to be examined. For a careful analysis of lawmaking in the U.S. Congress, see Jeffrey Rachlinski & Cynthia Farina, Cognitive
Psychology and Optimal Government Design, 87 Cornell L. Rev. 549 (2002). I
will therefore only mention legislative acts in passing. See infra note 36.

Toward a Dialogistic Competition Policy (Nakagawa)A natural way to understand the basis of disagreement is to learn how
people process information and come to their conclusions in legal decision making.
Here I focus on three types of mechanism that lead to different conclusions for different people facing the same legal issue and information.
First, people who have different theories or policy preferences on antitrust will process information differently and will come to different conclusions. This is the lesson of theory-ladenness. The other two types are
psychological. Motivated reasoning and confirmation bias could leadagencies, courts and lawyers to generate different factual stories about acase and to test factual and legal hypotheses differently, thus causing
disagreements between them. 6
A. Theory-Ladenness and Different Underlying Theories

Theory-ladenness is an idea about our observation. Our observation(we see x), or our understanding of what we observe (we see that x is ahuman being) is determined by our underlying theory. 7 As Norwood
Hanson put it, " ... seeing is a 'theory-laden' undertaking. Observation ofx
is shaped by prior knowledge ofx."8William Berwer and Bruce Lambert provided a clear picture of the6

I do not intend to draw a comprehensive picture of how legal decisions are
made. For example, I will not refer to group polarization where like-minded people go to extremes, which is obviously relevant for both administrative agencies
and higher courts. See, e.g., Cass Sunstein & Thomas Miles, Depoliticizing Administrative Law, in IDEOLOGY, PSYCHOLOGY, AND LAW 729, 733-734(Jon Hanson ed., 2012). Since my focus is on the decision output of a group rather than the intra-group process leading to the ultimate conclusion, I treat agroup (or sub-groups within a larger group: the majority and the minority) as
united with one voice. Basically, I will concentrate on the intrapersonal processesof legal decision making.
7 James Ladyman, UNDERSTANDING PHILOSOPHY OF SCIENCE 110-114(2002).
8 Norwood Hanson, PATTERNS OF DISCOVERY 19 (1958).
~t!!:f-'t~i§f(~~.JiJf~

Vo1.20(2013)175mechanism behind theory-ladenness. 9 According to them, our perception
is determined by the interaction between top-down theory of information
and bottom-up sensory information. When bottom-up information is ambiguous, top-down information has a strong impact on our perception.
On the other hand, when bottom-up information is strong, it will override
top-down information. 10
Let us take me, speaking in a conference room, as an example. It
should be quite obvious to the audience that I, the subject making sounds
before the audience, am a human being. No one would think that I am a
Martian, an alien from Mars. In this case, the information which the audience receives from my external behavior and appearance is obvious
enough. Then, think of another situation. Suppose that I come out fromnowhere into a spacecraft, and say hello to the crew. In this situation, theinformation that the crew receives increases the ambiguity. How could ahuman being pop into a spaceship? However, if the crew somehow concludes that I am a human being, and if they justify their belief by the observation that I am not green, then that is a theory-laden inference.
Theory-ladenness has immediate applications in competition law. I
will give two examples from U.S. antitrust practice. First, U.S. antitrustcase law has developed a quick look rule of reason analysis towards horizontal agreements between competitors. A restriction on the number ofcollege football games broadcast on TV was prohibited in the NCAAcase. 11 In the Indiana Federation of Dentists case, dentists' refusal tosubmit X rays to dental insurers was held to be an unreasonable restraint
9

William Brewer & Bruce Lambert, The Theory-Ladenness of Observation andthe Theory-Ladenness of the Rest of the Scientific Process, 68 Philosophy of
Science 176 (2001).
10 Id. at 179-184. Recent research on person construal shares the basic framework in that ambiguity is the key situational factor mediating this mechanism.
See Jonathan Freeman & Nalini Ambady, A Dynamic Interactive Theory of Person Construal, 118 Psycho!. Rev. 247 (2011) (arguing that our higher-order social
cognition dynamically interacts with lower-level perceptual processing in construing other people).
11 National CollegiateAthleticAss'n v. Board ofRegents, 468 U.S. 85 (1984).
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Toward a Dialogistic Competition Policy (Nakagawa)of trade because this information was desired by the insurers to determine whether a particular treatment was cost justified. 12 In these cases,
the Supreme Court concluded that these practices violated antitrust laws
(Section 1 of the Shermac Act and the corresponding Section 5 of the
FTC Act) without a full analysis of market power.
As later clarified by the Supreme Court in the California Dental Association case, 13 the quick look rule of reason analysis is justified when
"an observer with even a rudimentary understanding of economics could
conclude that the arrangements in question would have an anticompetitive effect on customers and markets." 14 On the other hand, the Court
declined to apply this quick look rule of reason analysis to the instantcase, because "there must be some indication that the court making thedecision has properly identified the theoretical basis for the anticompetitive effects" 15 These holdings make it clear that theories and observations (record evidence and findings of fact) are correlated in just the way
taught by theory-ladenness. Compared to the quick look rule of reason
analysis, per se illegal rules seem to be more theory-laden.
The other example can be found in the 2010 Horizontal Merger
Guidelines, where five types of evidence of adverse competitive effects(which are referred to as enhancing market power) are classified in paragraph 2.1. 16 Of these five types of evidence, the first two types (actual
observed price effects in the relevant market or similar markets) are information with relatively little ambiguity, as long as their methodologicalambiguity is cleared by having internal validity. On the other hand, theremaining three types (market shares and concentration; substantial
head-to-head competition; disruptive role of a merging party) need theories in order to understand that they have something to say about adverse
competitive effects. The approach of these Guidelines shows that the12

FTC v. Indiana Federation of Dentists, 476 U.S. 447 (1986).
California Dental Ass'n v. FTC, 526 U.S. 756 (1999).
14 Id. at 770.
15 Id. at 775 n.l2.
16 Dep't of Justice & FTC, Horizontal Merger Guidelines (2010).
13

agencies apply different analytical tools to reflect different levels of ambiguity in the available evidence.
If theory-ladenness holds true in the antitrust setting, it is easy to see
how we can better understand others who disagree with us. The key is thedifferent underlying theories held by others. I define theories verybroadly as "propositions for understanding (affirmatively or negatively)
the world and phenomena around us." As this loose definition shows,underlying theories, unlike scientific theories, need not require predictions and their empirical testing. Otherwise, normative theories like specific policy preferences, theories of justice, or religion will fall out frommy analysis, even though these are frequently at work beneath deep disagreements.
1. Articulated Underlying Theories

Disciplines have different underlying theories for analyzing and understanding different aspects of the world. Different underlying theories
of law and economics can usefully be explained by Daniel Kahneman's
two concepts of utility. Kahneman distinguishes four types of utility, but
two of them concern my analysis here: "decision utility" and "experienced utility". Decision utility means the weight assigned to the desirability of a decision, which is inferred from observed choices. 17 On theother hand, experienced utility refers to the measure of the hedonic experience of an outcome. Lawyers typically starts their analyses by observing experienced disutility, whereas economists typically assign utility byinferring it from observed choices such as prices and quantities transacted. How lawyers and economists identify "bad" results or situations thatshould be addressed depends on their different underlying theories of

17 See Daniel Kahneman et al., Back to Bentham? Explorations of Experienced
Utility, ll2 Q. J. Econ. 375 (1997). Decision utility is a revealed preference notion. Daniel Kahneman & Richard Thaler, Economic Analysis and the Psychology of Utility: Applications to Compensation Policy, 81 Am. Econ. Rev. 341(1991).

Toward a Dialogistic Competition Policy (Nakagawa)

utility.
The most salient example that shows different underlying theories oflaw and economics in antimonopoly law is found in the prohibition of theabuse of a superior bargaining position, which is defined in Article2(9)(v) of the Antimonopoly Act. 18 The 2009 Amendment to the Antimonopoly Act enhanced the sanctions against abuse of a superior bargaining position by making it subject to a mandatory surcharge, in addition to a traditional cease and desist order by the Japanese Fair Trade
Commission (JFTC). The amount of the surcharge is fixed at one percentof the sale (or purchase) volume for a maximum of three years, and thesale/purchase amount is based on the transactions with those who wereabused. 19 Despite these statutory limitations, the amount of the surcharge
will generally be enormous, and this is expected to be one of the mostcontroversial areas in Japanese antimonopoly law practice.
It is not necessary for alleged abusers to have a dominant market position. If those alleged to have been abused are heavily dependent on thetransactions with the alleged abuser, the latter's opportunistic conduct isprohibited. Typical examples of abusive conduct include demands byretailers that suppliers take retailers' inventory on-site or suppliers pay
sponsorship money, when these demands contribute nothing to the suppliers' benefits, and demands that suppliers sell below cost. 20 Japaneselawyers generally favor prohibiting these practices (particularly those
Abuse of a superior bargaining position is prohibited by Article 19. An English
version of the Japanese Antimonopoly Act can be accessed at the Japan Fair
Trade Commission's website.
19 See Article 20-6.
20 Purchasing below the supplier's cost is exploitative pricing by the buyer, andsimilar arguments about a seller's excessively high prices hold. For a balanced
analysis of exploitative high prices, see Bruce Lyons, The Paradox of the Exclusion of Exploitative Abuse, in THE PROS AND CONS OF HIGH PRICES 65(2007) (arguing that exploitative high prices should be reached when structural
entry barriers or historically unchallenged exclusionary practices exist, with suggestions of multiple remedies). Note that concerns against regulating exploitative
prices would not hold for non-price abuses in the text.
18

who are not antitrust specialists). Increasing support for this policy fromthe legislature is evidenced by the fact that the sanction against theseabuses was increased most in the latest amendment. For economists, on
the other hand, prohibiting such opportunistic behavior is hard to justify,
since it is unreasonable to keep an abusive relationship in the first place,
without expecting increased welfare for both sides in the future. Thus,
economists and lawyers observe the alleged abuser's conduct differently,
based on their different theories. Theory-ladenness also teaches that, foras long as lawyers assume that this practice is obviously bad conduct, atheoretical reexamination of the underlying theories will not be made,even though abuse is an ambiguous concept with inevitable line-drawing.
One way for lawyers to start reexamining their underlying theories (assuming they wish to), is for them to rely more on empirical arguments
showing that regulating the abuse of superior dominant positions would
contribute to a more competitive environment. 21
The above examples have identified different underlying theories ofanticompetitive effects, law, and economics. The California Dental Asso21

Seeking even indirect evidence from existing research is difficult, as expected.
Studies on relational governance have emphasized the role of relational norms(such as trust) in attenuating opportunism. See, e.g., Laura Poppo & Todd Zenger,
Do Formal Contracts and Relational Governance Function as Substitutes orComplements?, 23 Strat. Mgmt. J. 707 (2002); Anandasivam Gopal & Balaji
Koka, The Asymmetric Benefits of Relational Flexibility: Evidence from Software Development Outsourcing, 36 MIS Quarterly 553 (2012). Based on this lineof research, we could treat inter-organizational trust as a proxy for reduced opportunistic behavior. One study surveyed transactions between manufacturers andsuppliers, and analyzed the impact of interpersonal trust on lagged performance(that is, competitive advantage and joint profit performance, among other things,
one year later). They argued that trust had a significant, positive effect when opportunism was low. See Sandy Jap & Erin Anderson, Safeguarding Interorganizational Performance and Continuity Under Ex Post Opportunism, 49 Management
Sci. 1684 (2003). We can interpret this finding as suggesting that transactions
with less abusive behavior will promote competition. Economists might be dissatisfied with the methodological aspects such as the seven-point Likert scale, but
my point is that here is a valuable clue to start with and develop from.

Toward a Dialogistic Competition Policy (Nakagawa)

ciation case cited above is an example of the majority and the dissent
judges perceiving the level of ambiguity (or whether the case was an easy
one or not) differently. That led them to put different weights on the underlying theories of anticompetitive effects, which ultimately separated
their different underlying theories in depth and novelty.
2. Discovering Underlying Theories

A recent controversial monopolization case in Japan offers anotherexample. In the JFTC case against the JASRAC (Japanese Society for
Rights of Authors, Composers and Publishers), 22 which continues to be adominant collective rights organization in Japan, the JFTC reviewed andvacated its cease and desist order against the JASRAC. The JFTC had
initially ordered the JASRAC to cease and desist from a specific way ofcollecting royalties (a way that does not reflect the proportion of works
controlled by the JASRAC), because it discouraged competing collective
organizations from entering or prospering in the market. After an administrative hearing, the JFTC vacated its order. The complaint counsel
seemed to have believed that this was an easy exclusionary case with few
or no confounding factors, whereas the majority of the Commission23
thought otherwise and concluded that there was insubstantial evidence tosupport its claim, finding that the entrant's unpreparedness was theproximate cause of its marginalized position.
The complaint counsel's overconfidence was accompanied by a poor
examination of its theory of exclusion. The complaint counsel argued thatsince the JASRAC had been the dominant collective organization· withblanket licenses, broadcasters (licensees) would avoid paying extra royalties to competing entrants. 24 However, the problem with this proposi-

22 Shadan Hojin Nihon Ongaku Chosakuken Kyokai ni taisuru Ken (June 12,2012).
23 One Commissioner did not sign the decision.
24 The interesting twist here is that another aspect of collecting fees for blanket
licenses has been challenged as an exploitative abuse in Europe. Kana! 5 v. STIM.

tion is that we do not know the counterfactual competitive world, unless
we first specify an alternative competitive way of collecting royalties. 25
In other words, we do not know the anticompetitive effect without first
specifying the remedy to be imposed. On the other hand, the Commission
spent little ink on articulating when specific conduct is exclusionary, thus
failing to clarify its underlying theory. By keeping this obscure, theCommission in effect held (though implicitly) that only when entrants
exited from the market, did the alleged conduct qualify as exclusionary
conduct.
The lesson of the JFTC case, for the purpose of this essay, is that underlying theories are not always clarified or well developed, and thus wehave to discover and analyze them so that we can better understand others' legal reasoning. In the next section, I will describe other mechanisms
working behind disagreements that are different from, but still somewhat
similar to, theory-ladenness.
B. Motivated Reasoning and Confirmation Bias

Let us delve a little deeper into the legal reasoning process. There are
two mechanisms that have been adapted from psychology to explain legal reasoning: motivated reasoning and confirmation bias. 26 Motivatedreasoning is reasoning in which people motivated to arrive at a particularconclusion will search their memories and construct beliefs that could
C52/07 [2008].
I benefited from discussion with Ryoko Oki on this point.
26 Motivated reasoning has frequently been referred to in research on legal decision making, but only one article, as far as I know, treats motivated reasoning andconfirmation bias with equal weight. See Barbara Spellman & Frederick Schauer,
Legal Reasoning, in THE OXFORD HANDBOOK OF THINKING AND
REASONING 719, 720-721, 723 (Keith Holyoak & Robert Morrison eds., 2012)(referring to motivated reasoning and confirmation bias to explain a legal realist'sview of judging). See also Antony Page, Unconscious Bias and the Limits of
Director Independence, 2009 U. Ill. L. Rev. 237, 262-277 (2009) (modeling corporate directors' decision making).
25

Toward a Dialogistic Competition Policy (Nakagawa)support their desired conclusions. 27 This selective information processing, however, is constrained by prior knowledge and the plausibilityof the given information. 28 People draw the desired conclusion only ifthey can muster up the evidence necessary to support it. 29 In other words,
motivated reasoning is triggered to the extent that the subjects being
judged have ambiguity and allow different criteria to be selected by different people. 30 Great similarity is detected between motivated reasoning
and theory-ladenness. If people have different policy preferences as their
desired goals (which are also classified as underlying theories), they
could generate different factual beliefs, just as underlying theories have agreat impact on observations. 31 In such a situation, knowing others' policy preferences (directional goals) is important.
Confirmation bias is the phenomenon where people tend not to seek
evidence contradicting the hypothesis which they are testing. It usuallyrefers to ''unwitting selectivity in the acquisition and use of evidence."32
Even when people have no material and personal stakes in the outcome,people ''tend to look for and examine information that would fit the
Ziva Kunda, The Case for Motivated Reasoning, 108 Psycho!. Bull. 480, 483( 1990). I limit my treatment to reasoning driven by directional goals and do notmention accuracy-driven reasoning.
28 Id. at 485-486, 490.
29 Id. at 482-483.
30 Daniel Molden & Tory Higgins, Motivated Thinking, in THE OXFORDHANDBOOK OF THINKING AND REASONING 390, 398 (Keith Holyoak &Robert Morrison eds., 2012). See also Joshua Furgeson & Linda Babcock, Legal
Interpretation and Intuitions of Public Policy, in IDEOLOGY, PSYCHOLOGY,
AND LAW 684, 689 (Jon Hanson ed., 2012)(arguing that there will be more
latitude for motivated reasoning where there are legitimate arguments on bothsides and multiple plausible interpretations- where the cases are hard cases).
31 Recent research on motivated reasoning in policy areas has put more emphasison discrepancies in factual beliefs. See, e.g., Dan Kahan, Neutral Principles, Motivated Cognition, and Some Problems for Constitutional Law, 125 Harv. L. Rev.
1, 24-25 (2011).
32 Raymond Nickerson, Confirmation Bias: A Ubiquitous Phenomenon in Many
Guises, 2 Rev. Gen. Psychol. 175 (1998).
27

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Vol.20(2013)183

proposition being tested more than information that would contradictit." 33 In this respect, confirmation bias is clearly distinguished from motivated reasoning. However, motivated reasoning and confirmation bias
have frequently been taken to be similar phenomena, and the literature on
one side has been cited as the empirical support for propositions on theother; I will explain the reason for this later. Despite this general tendency, I distinguish these two mechanisms, following those who emphasize
the unwitting aspect of confirmation bias.
This essay imposes further classifications on these mechanisms: I
characterize motivated reasoning as "motivated hypothesis generation,"and confirmation bias as "unmotivated/motivated hypothesis testing."
Hypotheses in this context include both factual and legal hypotheses that is, hypotheses about causal relations or risks, as well as hypotheses
that a specific mode of legal interpretation or legal reasoning is sound. 34
Since hypothesis generation usually precedes hypothesis testing, this
distinction clarifies the different stages of legal decision making. Take,for example, decision making by the antitrust agencies with an adjudicative function. Factual hypotheses are generated gradually in the investigation stage, are tested in the administrative trial, and are further tested
33

Thomas Gilovich & Dale Griffin, Judgment and Decision Making, in 1
HANDBOOK OF SOCIAL PSYCHOLOGY 542, 546 (Susan Fiske et al. eds.,
5th ed. 2010). Testing a hypothesis about a target person's extroversion/introversion
is an example where participants have no personal or material stakes in the answer. See Mark Snyder & William Swann, Hypothesis-Testing Processes in Social Interaction, 36 J. Pers. Soc. Psychol. 1202 (1978).
34 It has been argued that motivated reasoning influences the legal interpretationof statutory texts as well. That is, policy preferences (desired conclusions) form
the bases of specific methods of interpretation. See Furgeson & Babcock, supranote 30 at 686-687. As Chemerinsky argued, a court's decision to avoid judgment
and defer to the political process is itself a value choice. See Erwin Chemerinsky,
The Vanishing Constitution, 103 Harv. L. Rev. 43, 100 (1989). However, since
there is currently little empirical evidence on motivated legal hypothesis generation when compared to the available evidence on motivated factual hypothesis
generation, I focus my argument in this essay on factual hypothesis generation
when referring to motivated reasoning.

Toward a Dialogistic Competition Policy (Nakagawa)by the reviewing courts. 35

1. Different Facets of Psychological Influence
Given this ammunition, we can now depict three patterns of legal
decision making process where motivated reasoning and/or confirmation
bias influence the ultimate conclusion.
(a) Factual Hypothesis Generation Precedes Policy Preference
In this case, a factual hypothesis is generated in an unmotivated way,
but based on this new hypothesis, a policy preference is produced (orreplaces an older one). For example, new learning about the competitiveeffects of certain practices, starting from the Chicago School antitrust to
game theory, has changed the antitrust agencies' enforcement priority, by
replacing the old factual hypotheses. 36 In the factual hypothesis generation stage, people are initially unmotivated, but once a specific policy
preference is produced, this preference will lead to selective information
processing when testing the hypothesis. Therefore, this case involves"motivated hypothesis testing." Factual hypothesis in this case can also
form the conventional wisdom or a rule of thumb adopted by agencies
and courts.

35 In hard cases, it may be hard for some members of the agencies to generate
factual hypotheses in the first instance. In such a case, minority members of thedecision-making body may have to test a hypothesis given by the majority members.
36 Legislative acts based on disagreements with other branches will most likely
fit this pattern of decision making. For example, the backlash against the U.S.
Supreme Court increased the policy preference for the constrained court, which
was reflected in new state law provisions and two Federal laws (the Clayton Act
and the Federal Trade Commission Act) that toughened antitrust policy. See
Rudolph Peritz, COMPETITION POLICY IN AMERCIA, 1888-1992 63-65(1996). A recent salient example outside antitrust policy is the impact that the
Fukushima nuclear accident in March 2011 had on the preferences for nuclear
energy policy inside and outside Japan.

(b) Policy Preference Precedes Hypothesis Generation
People who have specific preferences about a desirable policy may
generate factual hypotheses that are favorable to their desired goals, andtend not to seek evidence that would contradict these hypotheses when
testing them. In this case, both "motivated hypothesis generation" and"motivated hypothesis testing" occur. We now see why motivated reasoning and confirmation bias have frequently been treated as intertwined
phenomena. Motivated reasoning is likely to induce motivated confirmation bias, led by directional goals.
Let me give an example. In hard-core cartel cases, which are one ofthe priorities of antitrust enforcement, agencies led by this preference
could generate self-serving factual hypotheses and examine these hypotheses self-servingly. In a 2011 bid-rigging case, the JFTC alleged that
Omori Kogyo joined the conspiracy later on, but the JFTC barely examined whether the evidence it produced could satisfy the statutory requirements. The JFTC knew that this case involved ambiguity because it
cited numerous indirect evidence of communication, including evidence
that core members of the conspiracy transmitted the price to be bid by
Omori Kogyo, though Omori Kogyo never won a contract and just cooperated with the other conspirators. The JFTC concluded by finding that
Omori Kogyo joined the conspiracy, but lost its case in the Tokyo High
Court. 37 This case is explained as one in which motivated reasoning led
the agency to insufficient reasoning.
(c) Unmotivated Hypothesis Testing
Decision makers in this pattern do not generate factual or legal hypotheses nor do they hold specific policy preferences in advance. For
example, generalist judges in the high courts will review JFTC decisions
in Japan. In such a situation, even when these judges are free from prejudice, they may ignore evidence which contradicts the hypothesis being
tested. This is what confirmation bias teaches.
37

Omori Kogyo v. JFTC, 2143 Hanrei Jiho 76 (Tokyo High Court, Jun. 24,2011).

Toward a Dialogistic Competition Policy (Nakagawa)

2. Limitations and Caveats

On the three patterns of legal decision making I described above, two
caveats are in order. First, the descriptions oflegal decision making given
above do not comprehensively explain all kinds of legal decision making.
Since my purpose is to understand those who disagree with us, I focus on
the drivers of divergent factual determinations and conflicting legal perspectives. I identified these drivers as hypothesis generation and hypothesis testing, which are psychological factors reflected in external legal
activities. These are the checkpoints to discover how other people reason
differently from us.
The preceding research has devoted considerable effort to modeling
judicial decision making. 38 However, too many studies have focused on
the correlation between judges' political orientations (liberal or conservative) and the outcomes of cases. 39 The political orientations of judges are
not always visible outside the U.S. context, nor are the views on every
specific legal policy or every controversial case divided between those ofconservatives and liberals. A more desirable empirical strategy is tochoose a specific policy issue and examine whether the judges' intrapersonal preferences about this policy influence their judgments. Thisempirical strategy is undoubtedly difficult to implement, and there is
only one empirical study in which judges participated, explained their

Judge Posner classifies this research into nine theories. See Richard Posner,
HOW JUDGES THINK 19-43 (2008). Other recent important books in this field
include: Eileen Braman, LAW, POLITICS, AND PERCEPTION (2009); THE
PSYCHOLOGY OF JUDICIAL DECISION MAKING (David Klein & Gregory
Mitchell eds., 2010); Michael Bailey & Forrest Maltzman, THE CONSTRAINED COURT (2011); IDEOLOGY, PSYCHOLOGY, AND LAW (JonHanson ed., 2012); Lee Epstein et al., THE BEHAVIOR OF FEDERAL JUDGES: A THEORETICAL AND EMPIRICAL STUDY OF RATIONAL CHOICE(2013). Of course, none of these contributions so much ends the discussion as
invigorates it. Existing research has not benefitted from collaboration between
professors of political science and professors of law.
39 See Furgeson & Babcock, supra note 30, for a summary of the literature.

38

attitudes about the specific policy (the death penalty, in this study), andevaluated social science evidence (about the deterrent effect of capital
punishment). 40 Other studies have relied instead on experiments, inwhich law school students or undergraduate students are participants.41
Criticizing empirical research on judicial behavior is easy, but as long as
there is no adequate alternative for the better understanding of judicial
behavior or legal decision making in controversial cases, I have to relyon the best available theories today: motivated reasoning and confirmation bias.
The second qualification I have to add is that I do not mean to argue
that motivated reasoning and confirmation bias are evils in themselves.
Both motivated reasoning and confirmation bias involve a biased reasoning process in the sense that people make judgements based on limited information. Agencies and courts sometimes make bad decisions
mediated by motivated reasoning or confirmation bias, but they do notalways fail, even when motivated by directional goals. All I want to argue is that when we encounter dissenters who are hard to agree with, weshould think of their factual hypotheses and policy preferences so that we
can try to understand them better. Moreover, the merit of motivated reasoning is obvious when we think of writing a paper ourselves or making
a case for a client. Predicting criticism or deliberately taking the opposite
position would refine our arguments and may even uncover neglectedissues or new perspectives. Confirmation bias, on the other hand, will
40

Richard Redding & Dickon Reppucci, Effects of Lawyers' Socio-political
Attitudes on Their Judgments of Social Science in Legal Decision Making, 23 L.
Hum. Behav. 31 (1999). Furgeson & Babcock, supra note 30, at 689-693 divides
the judicial reasoning process into six mechanisms, which provides a testable
hypothesis for future empirical testing.
41 See, e.g., Joshua Furgeson et al., Do a Law's Policy Implications Affect Beliefs About Its Constitutionality? An Experimental Test, 32 L. Hum. Behav. 219(2008). On the difficulties of empirical analysis of judicial behavior and the justification of recruiting law school students as participants, see Eileen Braman,
Reasoning on the Threshold: Testing the Separability of Preferences in Legal
Decision Making, 68 J. Pol. 308, 311 (2006).

Toward a Dialogistic Competition Policy (Nakagawa)save our cognitive effort and make the efficient use of our cognitive resources possible.

II. Selectivity of Information Processing
I have argued that there are three kinds of mechanisms that allow us
to have a better understanding of others who disagree with us: theory-ladenness, motivated reasoning and confirmation bias. What is common among these mechanisms is the selectivity of information processing. We do not have the ability to process all the information at thesame time. Different disciplines focus on different aspects of the world
and the phenomena around us. Selective information processing is inevitable. Then, how could we have a better, interactive dialogue with those
who oppose us based on different subsets of information? Before embarking on this arduous journey, I will examine the nature of selectivity
and narrow the focus of my analysis.
A. Problematic Selectivity

As I mentioned earlier, motivated reasoning and confirmation bias
could produce inadequate legal reasoning and bad decisions in certain
situations. It is natural to rely on institutional design to prevent such failures. In the reform of EU merger control, devil 's advocate panels were
set up in the DG Competition to challenge teams who have investigatedcases. 42 Given my analysis in Part I that underlying theories (or policy
preferences) have a great impact on observations and hypothesis generation/testing, it is suggested that respected experts on theoretical antitrust

42

Jeremy Grant & Damien Neven, The Attempted Merger Between General
Electric and Honeywell: A Case Study of Transatlantic Conflict, I J. Competition
L. & Econ. 595, 630-631 (2005). Note that this is only one among the multiple
institutional and substantive changes introduced. On devil's advocates in general,
see Cass Sunstein, Group Judgments: Statistical Means, Deliberation, and Information Markets, 80 N.Y.U. L. Rev. 962, 1015-1016 (2005).

economics would be the best candidates for devil's advocates.
B. Selectivity Installed in Each Discipline
Different disciplines select different sets of information to gather andanalyze when trying to understand the world. We do not usually thinkthat such selectivity is in itself problematic or inadequate. Professors
teach their students to think like an economist or think like a lawyer.
However, if we wish to encourage interdisciplinary dialogue, we can nolonger take installed selectivity as a given. We saw in Part I that lawyers
and economists have different underlying theories for identifYing bad
results or situations that the law should address. Beneath these differences lie different value judgments.43 If this is the case, interdisciplinary
disagreements between economists and lawyers are no different in principle from political controversies over abortion, climate change, or gun
control.
I have described two different levels of selective information processing. One is mediated by psychological influences and the other ismediated by disciplines. In practice, both are likely to operate at the sametime. Appointing an economist as a devil's advocate, by itself, might notassure an interactive dialogue within the agency. The reason is that the
selectivities installed in different disciplines are more intractable thanthose mediated by psychological mechanisms, and need a more fundamental treatment. Therefore, I will focus my argument on interdisciplinary dialogues in the remaining part of this essay.
Seeing that interdisciplinary disagreements are just like other clashesof values, lawyers might rely on the literature on deliberative democracy
for clues to a better dialogue. For example, Deliberative Polling (DP)offers at least a hope for a more interactive dialogue in situations where
there are deep divides. 44 The processes of DP are as follows. Randomly
43

See also infra note 53.
By "deep divides," I mean those disagreements caused by established values,
beliefs or theories that underlie specific policy preferences. When lawyers and44

Toward a Dialogistic Competition Policy (Nakagawa)sampled people are asked to participate in deliberative polling. The people who accepted are given carefully balanced briefing materials layingout the major arguments for and against given policy proposals, and they
discuss these issues in a small group and ask questions in sessions withexperts. Answers to questionnaires before and after this deliberation willshow the net (average) change and gross (individual) change in theiropinions. 45 Fishkin claims that in divided societies where communities
are divided over integration or separation, deliberative treatment changed
the participants' minds. 46 DP encourages an interactive dialogue as I
defined it above. 47 However, it is implausible that their model, without
any adjustments, is useful for deep disagreements between experts.
Before moving to my proposal for encouraging an interactive dialogue between lawyers and economists, I cannot help quoting the admonition oflris Young. As she put it, "The mirroring evoked by the ideasof symmetry and reversibility suggests that we are able to understand one
another because we are able to see ourselves reflected in the other people,
and find that they see themselves reflected in us. But such images of reflection and substitutability, I suggest, support a conceptual projection ofsameness among people and perspectives at the expense of their differ-economists disagree on antitrust policy, such disagreements are likely to be deep
divides.
45 James Fishkin & Robert Luskin, Experimenting with a Democratic Ideal: Deliberative Polling and Public Opinion, 40 Acta Politica 284, 288 (2005); Robert
Luskin & James Fishkin, Deliberation and 'Better Citizens,' Working Paper 5(2002). Deliberative Poll is meant to create a hypothetical public or a counterfactual, in that it sets the participants to deliberating more intensively than most ofthem ever do in real life. Robert Luskin et a!., Considered Opinions: Deliberative
Polling in Britain, 32 B. J. Pol. S. 455, 458 (2002). Fishkin explicitly distances
himself from consensus, which makes his model more appealing to situations
with deep divides. James Fishkin, WHEN THE PEOPLE SPEAK 39 (2009) (arguing that a deliberative design requiring a consensus "verdict" may yield resultsthat depart from the conscientious judgments of the de liberators).
46 Fishkin, id. at 161-168.
47 See supra note 4.
~t!!:1-t7t~~~.jjJf~

Yol.20(2013)191

ences.'"'8 Interactive dialogues are impossible without diversity-seeking
and attentive minds so that each can detect his or her own misunderstanding of others. Could everyone have such a noble mind in encountering aggressive dissenters? If that is not the case, shouldn't we take abold step to prevent us from widening the gaps? The next part gives myanswer.

Ill. Beyond Consumer Welfare
The goals of antitrust law, or the appropriate standard for specifying
anticompetitive conduct have been a recurring topic in the U.S. since the1960s.49 Some have argued that the total welfare (social welfare) standard should govem,50 while others argue that consumer surplus should,51
and still others adopt a more nuanced approach. 52 Note that recent arguments are more sensitive to contexts in one way or another and I have
had to sacrifice accuracy in classifying them.
A. Limitations of Both Standards

Given the two established disciplines of law and economics, it should
be obvious that choosing either total welfare or consumer surplus as the48

Iris Young, Asymmetrical Reciprocity: On Moral Respect, Wonder, and Enlarged Thought, 3 Constellations 340, 346 (1997).
49 A sample of recent research includes THE GOALS OF COMPETITION LAW(Daniel Zimmer ed. 2012; Abraham Wickelgren, Issues in Antitrust Enforcement,
in RESEARCH HANDBOOK ON THE ECONOMICS OF ANTITRUST LAW
267, 272-276 (Einer Elhauge ed., 2012); Roger Blair & Daniel Sokol, The Ruleof Reason and the Goals of Antitrust: An Economic Approach, 78 Antitrust L.J.
471 (2012).
50 See, e.g., Robert Bork, THE ANTITRUST PARADOX 81 & 427 (1993)(1978); Richard Posner, ANTITRUST LAW ix & 23-27 (2d ed. 2001).
51 See, e.g., Jonathan Baker, Competition Policy as a Political Bargain, 73 Antitrust L.J. 483, 521-22 (2006).
52 Wickelgren, supra note 49.

Toward a Dialogistic Competition Policy (Nakagawa)only goal of antitrust is likely to discourage an interdisciplinary dialogue.
Such a strategy will aggravate current deep divides between lawyers andeconomists in Japan. Moreover, both total welfare and consumer surplus
are imperfect as the only goal to pursue.
Total welfare is the aggregate sum of the welfare of all participants
who trade in a market. Total welfare presupposes a trade-off between
different individuals' utilities. 53 Japan has experienced two hard-corecartel cases which are difficult to explain using the total welfare standard.
(a) Monopsony Cartel with Inelastic Upstream Supply
In a 2008 bid-rigging case54 there were three buyers who used a certain category of metal to manufacture raw materials; the relevant productwas molten metal, which was discharged from waste disposal plants andsold by local governments to be used as the input for these buyers. Wouldsuch a cartel reduce the output of the metal sold by the local governmentsthat ran these plants, if the price was decreased due to collusion? Since
the relevant product was a by-product of waste, the supply function of
the molten metal was likely to be inelastic: a vertical line insensitive to
price change. 55 Output reduction might not be likely even in the long run
when it is costly for local governments to reduce supply.

53

Aggregating different individuals' well-being into a single measure of social
welfare involves value judgments. See Louis Kaplow & Steven Shaven, FAIRNESS VERSUS WELFARE 26 (2002).
54 Mitsubishi Materials Co. hoka Niken ni kansuru Ken, 55 Sink:etsushii 692 (Oct.
17, 2008).
55 Roger Blair & Jeffrey Harrison, MONOPSONY 1N LAW AND ECONOMICS
81-82 (20 10) argue that in the context of inelastic supply, producers may reduce
supply in the future. The supply function in this case may have become elastic if
the local governments could easily have increased their upstream charges for
waste disposal services. However, such a policy change would be unlikely.
Moreover, even stockpiling the metals would not be costless and therefore allows
room for a conspiracy.

(b) Collusion Producing Higher Value with Lower Costs

For conspirators in bid-rigging, it is the most profitable to let the least
cost builder win the bid and the contract. The other conspirators will
share the profit with the least cost builder. A hypothetical public procurement could be thought of, in which the same conspirators have nochance to meet again, thus the collusive rule to rotate the winner is impractical. Suppose further that the lowest cost winner built ahigh-value-added stadium or building which is more valuable than that
could have been accomplished with competition. In other words, collusion produced more value with lower costs than competition, which
would have produced a less valuable product with moderate costs. Such ahypothetical situation might be realized in unjust enrichment lawsuits
where the relevant product is one-of-a-kind for a special order.
How would courts decide on such a hypothetical case? We can get aclue from a Japanese district court case in 2011. 56 Since this was an unjust enrichment case, the court had to set off the collusive price against
the value of the product. In calculating the product's value, the average
total cost and the competitive margin were added together. What thisdecision suggests is that in our hypothetical case, the additional value
added by the lowest cost conspirator would not be legally recognized.
Consumer surplus, on the other hand, would explain these cases but
would raise questions as well. Consumer surplus is not necessarily thesame as consumer interest, in that the former presupposes aggregating
the gains (winners) and the losses (losers). For example, sellers tying
products or using resale price maintenance could face heterogeneous
consumers: some consumers are willing to accept tying or presale promotional services, but others decline them. How do we evaluate consumer surplus in such situations? The answer seems obvious, but it is notnecessarily so for lawyers. Those consumers with a larger surplus in theaggregate, who are not necessarily the majority in number, would decide
the consumer voice. As long as we aggregate the utilities and disutilities
56 Japan v. FDK Co., (Tokyo District Court, June 23, 2010).

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Toward a Dialogistic Competition Policy (Nakagawa)of heterogeneous consumers, we have to make decisions without the relevant consumers' participation or representation in the process.
B. Manipulating Policy Preference as Dialogue Support

If we accept the progress that have been made in law and in economics within their disciplines, it is difficult to concentrate on just one perspective and ignore or discard the other. Underlying theories, which havebeen emphasized in this essay, have been offered by the contributions of
economics to antitrust law. It is unthinkable that antitrust policy would
continue to develop without more help from economics. On the other
hand, it is likewise unthinkable that antitrust law will be fully explainedby the jargon of economics. Law should be something comprehensible tononprofessionals as well. If the autonomy within one discipline is too
influential, antitrust policy will lose public support. 57
We have to devise a prescription that encourages interdisciplinary
dialogue without significantly changing the methodological merits ofeach discipline. This is more easily said than done, but my proposal is to
manipulate different policy preferences. My proposal has three steps tofollow.
( 1) Imagine a situation where there are two policy preferences thatare antagonistic to each other. Let us start by choosing either one as a
On the relationship between the public and the autonomy in science, see
Heather Douglas, SCIENCE, POLICY AND THE VALUE-FREE IDEAL 7,
96-97, 137-148 (2009) (arguing that the translation of scientific uncertainty topolicy needs case-specific considerations of social, economic, and ethical values,
so long as these values play an indirect role in evaluating the level of uncertainty); Bernard Rollin, Animal Research, Animal Welfare, and the Three R's, 10 J.
Philos. Sci & L. I (Apr. 5, 2010). On the influence of forensic evidence on theautonomy of science, see Ioannis Lianos, 'Judging' Economists: Economic Expertise in Competition Law Litigation: A European View, in THE REFORM OF
EC COMPETITION LAW: NEW CHALLENGES 230-233 (loannis Lianos &loannis Kokkoris eds., 2010).
57

given preference.
given preference0

opposing preference(2) We move the given preference a little bit in the direction of the
opposing preference so that a narrow overlapping area arises. This area issecured by working out convergent cases where people with the given
preference would come to the same policy preference as people having
the opposing preference. Such convergent cases may be hypothetical or
special cases. As the convergent area is narrower, we can marginalize theextent of manipulating the given preference.
given preference--.--.

00

opposing preference(3) Focusing on these convergent cases, we reformulate the given
preference so that these convergent cases are also explained by the reformulated given preference. Reformulation could be achieved bybroadening the given preference, using abstraction or superordinate concepts.
What happens when we apply these steps to disagreements over antitrust goals (total welfare vs. consumer surplus)?
--.--. 0

consumer surplus

0

total welfare

Starting from total welfare, it is readily clear that reformulating total
welfare is difficult or even impossible, because this is the same as subverting welfare economics itself. As I said at the outset of this section, I
will preserve the methodological merits of the disciplines. Then, we startinstead from consumer surplus. We have to work out convergent cases
for which people who prefer consumer surplus would support the sameToward a Dialogistic Competition Policy (Nakagawa)conclusion as those who use the total welfare standard. For example,
aggressive price competition between homogenous sellers will ultimately
lead to a stalemate where no more efforts could cut price. If a seller withmarket power could invest in innovation and introduce new products,
there could be a situation where the utilities for some consumers and thetotal welfare would increase, while consumer surplus in the aggregate
would decrease. 58 However, a mixture of price and quality competition
may be preferable to total price competition even though the consumer
surplus for consumers with a higher willingness to pay is reduced. If thiscase is correctly a convergent case, reformulating the consumer surplus
standard is necessary to incorporate such a case.
After reformulation, I would argue that "preserving sellers' abilities
and incentives to serve buyers' needs (or buyers' abilities and incentives
to switch to different sellers based on their identities) in the aggregate"
should be the goal of antitrust policy. In other words, antitrust should
protect the flexibility to serve buyers' needs in the aggregate (flexibility
standard). The qualification "in the aggregate" means that we should
evaluate the flexibility of sellers (or of buyers when purchasing) in theoverall market.
There are two implications to be drawn from the reformulated goal of
antitrust. First, this reformulation makes us realize that we still have poor
understandings of consumer choice or consumer needs in predicting
competitive effects, even though consumers have been thought to be thebeneficiaries of competition law. Secondly, the flexibility standard provides a perspective for reexamining the rationale of regulating the abuseof a superior bargaining position. From the flexibility standard, what weshould examine is the impact that these abuses would have on the aggregate flexibility of the abuser and the abused. 59 This is quite similar to
examining a vertical joint venture (or a failure of one). We will ask whichparty could better determine the efficient use of the abused parties' employees or money to serve the buyers' needs. The flexibility approach
58

59

What is in my mind is a kinked demand curve with two prices.
As I mentioned, flexibility should be evaluated in the aggregate.

also raises a question of whether all kinds of abuses should be equallysubject to mandatory surcharges as provided in Article 20-6.

Conclusion
This essay argued that our failure to understand those who disagreewith us comes from selective information processing. Such selectivity is
not easily avoided even with sincere and hard thinking. The reasons are
two-fold: one is that selectivity is installed in our disciplines and the other is that our minds are at times fallible due to motivated reasoning andconfirmation bias. I proposed manipulating policy preferences to support
an interactive dialogue. Such a manipulative strategy is not the conclusion, but is an aid to uncover new perspectives in order to encourage better understanding of each other and to encourage interactive dialogue.
Although I focused on the interdisciplinary manipulation of policy preferences, I believe that the same strategy is generally effective when there
are deep disagreements. I also proposed the flexibility standard as thegoal of antitrust. In this sense, I am imposing a third value, theory, or
preference, but this is justified as long as it encourages interactive dialogue within the antitrust community.
Readers may have felt that I am too pessimistic about the success of
dialogues between antitrust lawyers and economists. Successful precedents exist in the U.S. and Europe. However, the antitrust community inJapan is not comparable in its context to that of the U.S. where economic
analysis of law is prevalent, or to that of Europe where reforms in antitrust practice have been carried out.
This project started from the institutional design of competition policy but ended up focusing on the legal reasoning process at the intrapersonal level. My point is that even when situated in a good institutional design, the three mechanisms analyzed in this essay could produce
bad decisions. Future directions of research include institutional design,where research on groupthink is quite important. Another topic which I
did not fully analyze in this essay is the system of sanctions. The difficulty in examining sanctions lies in the fact that the guiding principles or
198

m-t!!:f-l(;$J!i!IJ~'¥:-liJfJE

Vol.20(2013)

Toward a Dialogistic Competition Policy (Nakagawa)underlying theories of sanctions are not necessarily clear. 60 The legal
decision making process described in this essay provides a basic framework, based on which we can examine the relationships between economic theory, empirical evidence, and rules of thumb. My proposal istentative and has to be tested in numerous specific contexts. The effectiveness of my proposal could be further evaluated by consulting the literature on debiasing/rebiasing61 and conflict resolution. This essay is thefirst step towards these rich areas of development.

See Ioannis Lianos, Competition Law Remedies: In Search of a Theory, in
THE GLOBAL LIMITS OF COMPETITION POLICY 177 (loannis Lianos &Daniel Sokol eds., 2012).
61 My proposal for manipulating preferences as dialogue support is a strategy tocounter motivated reasoning or biases which are taken as given. Jolls & Sunsteincall such a strategy an insulating strategy. Christine Jolls & Cass Sunstein, Debiasing through Law, 35 J. Legal Stud. 199,225 (2006).
60~t!t1-'t¥*~~~1i]f~

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