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

Ola Andersson, Hans Carlsson () and Håkan Holm ()
Additional contact information
Hans Carlsson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden, http://www.nek.lu.se/NEKhca/
Håkan Holm: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden, http://www.nek.lu.se/NEKjho

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)
New Economics Papers: this item is included in nep-com, nep-exp, nep-gth and nep-law
Date: 2006-05-03
View list of references

Downloads: (external link)
http://www.nek.lu.se/publications/workpap/Papers/WP06_12.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:hhs:lunewp:2006_012

Access Statistics for this paper

More papers in Working Papers from Lund University, Department of Economics
Address: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Contact information at EDIRC.
Series data maintained by David Edgerton ().