Do Managers Overreact to Each Others Promotional Activity?

• Main Authors: Bonfrer, Andre, Brodie, R.J.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 1996
• Subjects: Business
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/2298; https://doi.org/10.1016/s0167-8116(96)00020-1
• Institution: Singapore Management University

This paper examines the generalisability of Leeflang and Wittink's findings that managers tend to under- and overreact to each others' promotional activity (Competitive reaction versus consumer response: Do managers overreact?, International Journal of Research in Marketing 13 (1996), 103–119). Weekly supermarket scanner data similar to that used by Leeflang and Wittink is used to test hypotheses about price and promotion reactions by manufacturers and retailers to competitors' actions. The replication study provides even stronger evidence that managers tend to under- or overreact and thus their behaviour deviates from the normative implications of economic theory.