Endogenous Communication and Tacit Coordination in Market Entry Games - An explorative experimental study
Author
Summary, in English
This paper explores experimentally the effects of costly communication possibilities in market entry games. It is shown that these effects depend on whether entry costs are symmetric or asymmetric. In the former, but not the latter case, communication possibilities increase coordination success substantially and are likely to generate inferior outcomes for consumers. Furthermore, cost asymmetries provide a tacit coordination cue that is robust to changes in the game and is used by experienced players as a substitute to communication. It is also shown that although communication opens up for aggressive market domination strategies, such strategies are not used often successful.
Department/s
Publishing year
2006
Language
English
Publication/Series
Working Papers, Department of Economics, Lund University
Issue
12
Links
Document type
Working paper
Publisher
Department of Economics, Lund University
Topic
- Economics
Keywords
- Communication
- Market Entry
- Coordination
Status
Published