Deterrence, Reputations, and Competitive Cognition

An aspect of competitive interactions is examined that has attracted increasing research attention: the relationships between deterrence and competitive reputations. A conceptual model of the antecedents and consequences of a firm's reputation for being a credible defender of its markets is bui...

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Bibliographic Details
Main Authors: Montgomery, David B., Clark, B.H.
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 1998
Subjects:
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/2310
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Institution: Singapore Management University
Language: English
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Summary:An aspect of competitive interactions is examined that has attracted increasing research attention: the relationships between deterrence and competitive reputations. A conceptual model of the antecedents and consequences of a firm's reputation for being a credible defender of its markets is built. Theory and limited empirical evidence suggests a firm with this reputation should deter competitive attacks against it. How a manager's competitive cognition about her opponents' patterns of activity in the marketplace and previous success can lead her to perceive a competitor as a credible defender is explored. The framework is tested using MBA students in a quasi-field setting, the Markstrat2 simulation game. The results of this study suggest that reputation deters attack only when the potential attacker considers the target firm a minor competitor.