The performance effects of unintended and purposive multimarket contact

Javier Gimeno
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Javier Gimeno: Associate Professor of Strategy and Management INSEAD, Boulevard de Constance, 77305 Fontainebleau Cedex, France, Postal: Associate Professor of Strategy and Management INSEAD, Boulevard de Constance, 77305 Fontainebleau Cedex, France

Managerial and Decision Economics, 2002, vol. 23, issue 4-5, 209-224

Abstract: Multimarket contact may arise from unintended encounters among competitors pursuing uncoordinated market expansion strategies, as well as from the strategic intent of firms seeking mutual forbearance with their rivals. Are the performance effects of unintended multimarket contacts different from those of purposeful contacts? Results in the US airline industry indicate that they are not. Multimarket contacts have a constant marginal effect on margins regardless of whether they occur at a level below or above the level that would be expected just by chance. In this case, the performance effect of multimarket contact is determined by the realized strategy, regardless of whether it was deliberate or emergent. Implications for other areas of strategy research are discussed. Copyright © 2002 John Wiley & Sons, Ltd.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:23:y:2002:i:4-5:p:209-224

DOI: 10.1002/mde.1062

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