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Endogenous communication and tacit coordination in market entry games An explorative experimental study

Andersson, Ola LU and Holm, Hakan J. (2010) In International Journal of Industrial Organization 28(5). p.477-495
Abstract
This paper explores the effects of communication in market entry games experimentally. It is shown that communication increases coordination success substantially and generate inferior outcomes for consumers when market entry costs are symmetric. Such effects are not observed when costs are asymmetric, since asymmetries provide a tacit coordination cue used by experienced players (as a substitute to communication). It is also shown that although communication is used both to achieve market domination equilibria and cooperative market separating equilibria, the latter type of communication is much more common and successful. (C) 2009 Elsevier B.V. All rights reserved.
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Communication, Market entry, Coordination
in
International Journal of Industrial Organization
volume
28
issue
5
pages
477 - 495
publisher
Elsevier
external identifiers
  • wos:000281490300006
  • scopus:78049309518
ISSN
0167-7187
DOI
10.1016/j.ijindorg.2009.11.003
language
English
LU publication?
yes
id
d0b2b9a3-d8cd-4b38-a411-11aa163ce5ef (old id 1697705)
date added to LUP
2010-10-22 14:58:05
date last changed
2018-05-29 10:00:59
@article{d0b2b9a3-d8cd-4b38-a411-11aa163ce5ef,
  abstract     = {This paper explores the effects of communication in market entry games experimentally. It is shown that communication increases coordination success substantially and generate inferior outcomes for consumers when market entry costs are symmetric. Such effects are not observed when costs are asymmetric, since asymmetries provide a tacit coordination cue used by experienced players (as a substitute to communication). It is also shown that although communication is used both to achieve market domination equilibria and cooperative market separating equilibria, the latter type of communication is much more common and successful. (C) 2009 Elsevier B.V. All rights reserved.},
  author       = {Andersson, Ola and Holm, Hakan J.},
  issn         = {0167-7187},
  keyword      = {Communication,Market entry,Coordination},
  language     = {eng},
  number       = {5},
  pages        = {477--495},
  publisher    = {Elsevier},
  series       = {International Journal of Industrial Organization},
  title        = {Endogenous communication and tacit coordination in market entry games An explorative experimental study},
  url          = {http://dx.doi.org/10.1016/j.ijindorg.2009.11.003},
  volume       = {28},
  year         = {2010},
}