Endogenous Communication and Tacit Coordination in Market Entry Games - An explorative experimental study
(2006) In Working Papers, Department of Economics, Lund University- Abstract
- 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.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/1387608
- author
- Andersson, Ola LU ; Carlsson, Hans LU and Holm, Jerker LU
- organization
- publishing date
- 2006
- type
- Working paper/Preprint
- publication status
- published
- subject
- keywords
- Communication, Market Entry, Coordination
- in
- Working Papers, Department of Economics, Lund University
- issue
- 12
- publisher
- Department of Economics, Lund University
- language
- English
- LU publication?
- yes
- id
- 8aa6e31d-8f0f-477b-a307-eb9ff11d7a2a (old id 1387608)
- alternative location
- http://swopec.hhs.se/lunewp/abs/lunewp2006_012.htm
- date added to LUP
- 2016-04-04 11:54:20
- date last changed
- 2018-11-21 21:07:55
@misc{8aa6e31d-8f0f-477b-a307-eb9ff11d7a2a, abstract = {{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.}}, author = {{Andersson, Ola and Carlsson, Hans and Holm, Jerker}}, keywords = {{Communication; Market Entry; Coordination}}, language = {{eng}}, note = {{Working Paper}}, number = {{12}}, publisher = {{Department of Economics, Lund University}}, series = {{Working Papers, Department of Economics, Lund University}}, title = {{Endogenous Communication and Tacit Coordination in Market Entry Games - An explorative experimental study}}, url = {{http://swopec.hhs.se/lunewp/abs/lunewp2006_012.htm}}, year = {{2006}}, }