Testing Whether Predatory Commitments Are Credible

Lott, John R, and Tim C Opler

The Journal of Business, 1996, vol. 69, issue 3, 339-82

Abstract: Many recent game-theoretic models suggest that, with asymmetric information, it can be profitable for firms to acquire a reputation for toughness to discourage later entry. The authors identify institutional arrangements that firms must undertake if predatory commitments are to be credible. For example, simply hiring managers who value market share or output maximization is insufficient if managers can be removed when it actually becomes necessary to engage in predation. Firms must also make removing the manager more difficult. The authors find no evidence that allegedly predatory firms are organized as these game-theoretic models imply. If anything, the reverse seems to be frequently true. Copyright 1996 by University of Chicago Press.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://dx.doi.org/10.1086/209694 full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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: https://EconPapers.repec.org/RePEc:ucp:jnlbus:v:69:y:1996:i:3:p:339-82

Access Statistics for this article

More articles in The Journal of Business from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().