Deterrence, Reputations, and Competitive Cognition

• Main Authors: Montgomery, David B., Clark, B.H.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 1998
• Subjects: Business
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/2310; https://proquest.umi.com/pqdweb?did=26357737&sid=10&Fmt=2&clientId=44274&RQT=309&VName=PQD
• Institution: Singapore Management University

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.