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

Ola Andersson, Hans Carlsson and Hakan Holm

No 2006:12, Working Papers from Lund University, Department of Economics

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.

Keywords: Communication; Market Entry; Coordination (search for similar items in EconPapers)
JEL-codes: C72 C91 D43 K21 L41 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2006-05-03
New Economics Papers: this item is included in nep-com, nep-exp, nep-gth and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in International Journal of Industrial Organization, 2010, pages 477-495.

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Journal Article: Endogenous communication and tacit coordination in market entry games: An explorative experimental study (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:lunewp:2006_012

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