How Multimarket Competition Fosters Collaboration: Mutual Forbearance and Market Power Effects

2015 ◽  
Vol 2015 (1) ◽  
pp. 12554 ◽  
Author(s):  
Wonsang Ryu ◽  
Thomas Brush ◽  
Jeffrey J. Reuer
Keyword(s):  
Market Power ◽  
Mutual Forbearance ◽  
Multimarket Competition

scholarly journals The Impact of Multimarket Competition on Innovation Strategy: Evidence from the Korean Mobile Game Industry

2020 ◽  
Vol 6 (1) ◽  
pp. 14 ◽  
Author(s):  
Jinju Lee ◽  
Jin Suk Park ◽  
Jeonghwan Lee
Keyword(s):  
Strategic Decisions ◽  
Mobile Game ◽  
Multiple Products ◽  
Innovation Activities ◽  
Content Development ◽  
Depth Analysis ◽  
Mutual Forbearance ◽  
Game Industry ◽  
Multimarket Competition ◽  
The Impact

Multimarket contact (MMC) refers to the situation in which more than two firms simultaneously compete with each other in multiple products and/or geographical markets. Most studies on MMC have explored how the market overlap creates “mutual forbearance”, which lessens the intensity of rivalry. While prior studies have mainly focused on how reduced rivalry from MMC influences market-related decisions, only a few have paid attention to its impact on innovation activities. The purpose of this research is to explore how multimarket competition influences different stages of innovation. Specifically, we focus on three stages of innovation: Content development, commercialization, and protection of IPs (Intellectual Property). This study is conducted as an exploratory case research based on the in-depth analysis of two leading Korean Mobile game companies. Based on our findings, we explain how mutual forbearance and observability of the rival’s competitive action influence the choice of strategic decisions across different stages of innovation.

Competitive Dynamics

Management ◽  
2019 ◽  
Author(s):  
Anja Tuschke ◽  
Viktoria Judith Salomon
Keyword(s):  
Theoretical Perspective ◽  
Large Body ◽  
Performance Outcomes ◽  
Competitive Dynamics ◽  
Multimarket Contact ◽  
Michael Porter ◽  
Mutual Forbearance ◽  
Multimarket Competition ◽  
Competitive Dynamics Research ◽  
Competitive Actions

This article introduces research in competitive dynamics, a collection of work that has developed within the field of strategic management since the late 1980s. Competitive dynamics is the study of interfirm rivalry constituted of competitive actions and responses, their micro- and macro-level context as well as their antecedents and consequences (Chen and Miller 2012, cited under Reviews). Related research addresses fundamental questions such as: “Why do firms engage in competitive rivalry?” “What characterizes the competitive interaction between firms?” “How do focal firms’ competitive actions and rivals’ responses influence firm performance?” “How do contextual factors influence competitive dynamics?” Competition has long been at the center of academic debate, starting with the analysis on the functioning of economic markets and Adam Smith’s welfare competition. While this debate had traditionally been dominated by economists, scholars such as Michael Porter introduced a management perspective on competition. Within the management discipline, two conceptions of competition developed. In a more static conception based on economic theory, competition was formalized as an inherent characteristic of market structures, viewing market forces as determinants of the degree and the type of competition within an industry (Baum and Korn 1996, cited under Multimarket Contact, Multimarket Competition, and Mutual Forbearance). A second conception was motivated by Joseph Schumpeter’s concept of “creative destruction” and the Austrian school of economics (Smith, et al. 2001, cited under Reviews). This dynamic conception of competition accentuates the individual behavior of each competing firm (Baum and Korn 1996, cited under Multimarket Contact, Multimarket Competition, and Mutual Forbearance) and became known as “competitive dynamics research.” It assumes that performance differences between firms operating in the same industry are the result of competitive actions that are aimed at obtaining successive temporary advantages (Young, et al. 1996, cited under Competitive Actions: Characteristics, Drivers, and Performance Outcomes). Since the beginning of the 1990s, the competitive dynamics research program has flourished, and a large body of work has emerged within the literature on competitive strategy, consisting of several sub-streams such as competitive action and response, first-mover advantage, and multimarket competition(Ketchen, et al. 2004, cited under Reviews). Research within these sub-streams is largely unified by its reliance on a common theoretical perspective, the awareness-motivation-capability (AMC) framework (Chen 1996, cited under Awareness-Motivation-Capability Framework). Leading scholars in the field of competitive dynamics are, among others, Ming-Jer Chen, Walter J. Ferrier, Danny Miller, and Ken G. Smith.

Multimarket Contact, Strategic Alliances, and Firm Performance

2015 ◽  
Vol 44 (4) ◽  
pp. 1551-1572 ◽  
Author(s):  
You-Ta Chuang ◽  
Kristina B. Dahlin ◽  
Kelly Thomson ◽  
Yung-Cheng Lai ◽  
Chun-Chi Yang
Keyword(s):  
Firm Performance ◽  
Market Share ◽  
Strategic Alliances ◽  
Multimarket Contact ◽  
Mutual Forbearance ◽  
Negative Effect ◽  
Multimarket Competition ◽  
The Relationship ◽  
Positive Effect

Research on multimarket contact and firm performance has produced mixed results. To reconcile this discrepancy, we theorize how varying levels of multimarket contact may generate mutual forbearance that influences firm performance. We also examine how strategic alliances moderate the relationship between levels of multimarket contact and firm performance. Our analysis of 233 semiconductor firms across 52 markets reveals that multimarket contact has an inverted U-shaped relationship with a multimarket firm’s market share. The number of strategic alliances that a firm has helps to further extend the positive effect of multimarket contact and mitigate its negative effect on the firm’s market share. Accordingly, our study contributes to the literature on multimarket competition by shedding light on the conditions under which multimarket contact may increase/decrease firm performance.

Vertical Boilerplate

2017 ◽  
Author(s):  
James Gibson
Keyword(s):  
Market Power ◽  
Real World ◽  
Empirical Work ◽  
Full Scale ◽  
Market Mechanism ◽  
Law School ◽  
Information Cost ◽  
Information Costs ◽  
Policy Proposals ◽  
Radical Solution

Despite what we learn in law school about the “meeting of the minds,” most contracts are merely boilerplate—take-it-or-leave-it propositions. Negotiation is nonexistent; we rely on our collective market power as consumers to regulate contracts’ content. But boilerplate imposes certain information costs because it often arrives late in the transaction and is hard to understand. If those costs get too high, then the market mechanism fails. So how high are boilerplate’s information costs? A few studies have attempted to measure them, but they all use a “horizontal” approach—i.e., they sample a single stratum of boilerplate and assume that it represents the whole transaction. Yet real-world transactions often involve multiple layers of contracts, each with its own information costs. What is needed, then, is a “vertical” analysis, a study that examines fewer contracts of any one kind but tracks all the contracts the consumer encounters, soup to nuts. This Article presents the first vertical study of boilerplate. It casts serious doubt on the market mechanism and shows that existing scholarship fails to appreciate the full scale of the information cost problem. It then offers two regulatory solutions. The first works within contract law’s unconscionability doctrine, tweaking what the parties need to prove and who bears the burden of proving it. The second, more radical solution involves forcing both sellers and consumers to confront and minimize boilerplate’s information costs—an approach I call “forced salience.” In the end, the boilerplate experience is as deep as it is wide. Our empirical work should reflect that fact, and our policy proposals should too.

Sign in / Sign up

Export Citation Format

Share Document