Advanced

Endogenous Communication and Tacit Coordination in Market Entry Games - An explorative experimental study

Andersson, Ola LU ; Carlsson, Hans LU and Holm, Jerker LU (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:
author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
Communication, Market Entry, Coordination
in
Working Papers, Department of Economics, Lund University
issue
12
publisher
Department of Economics, Lund Universtiy
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
2009-04-20 12:27:26
date last changed
2016-08-30 12:34:43
@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},
  keyword      = {Communication,Market Entry,Coordination},
  language     = {eng},
  number       = {12},
  publisher    = {ARRAY(0x9307e68)},
  series       = {Working Papers, Department of Economics, Lund University},
  title        = {Endogenous Communication and Tacit Coordination in Market Entry Games - An explorative experimental study},
  year         = {2006},
}