Premium
Imminent Entry and the Transition to Multimarket Rivalry in a Laboratory Setting
Author(s) -
Mason Charles F.,
Phillips Owen R.
Publication year - 2016
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/jems.12169
Subject(s) - rivalry , competition (biology) , baseline (sea) , economics , industrial organization , business , microeconomics , monetary economics , ecology , oceanography , biology , geology
In this paper we study the behavior of rivals when there is a known probability of imminent entry. Experimental markets are used to collect data on pre‐ and postentry production when there is an announced time of possible entry; some markets experience entry and other do not. In all preentry markets competition is more intense. Postentry behavior in all markets is more competitive compared to a baseline that had no threat. There is evidence that postentry multimarket contact raises outputs in those markets that did not experience entry, behavior we generally refer to as a conduit effect.