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Mutual forbearance among multimarket firms: A behavioral approach to tacit cooperation

Published online by Cambridge University Press:  28 November 2013

John Stephan  and
Richard Peters
John Stephan*
Affiliation:
Department of Organizations and Environments, Dyson Center, Marist College, North Road, Poughkeepsie, NY, USA
Richard Peters*
Affiliation:
Department of Business Administration, Division of Business, Xavier University of Louisiana, Drexel Drive, New Orleans, LA, USA
*
Corresponding author: jstephanphd@earthlink.net, rpeters1@xula.edu
Corresponding author: jstephanphd@earthlink.net, rpeters1@xula.edu
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Abstract

Emerging empirical evidence has noted that multimarket firms may not always behave in ways that are consistent with their multimarket positions. Assuming multimarket ties between firms exists that are sufficient to permit tacit agreement among them to refrain from aggressive competition, we describe how additional factors are likely to affect the decision of managers of multimarket firms to abide by such an agreement. In particular, we focus on factors that are likely to make the negative consequences of violating a tacit agreement of mutual forbearance more salient and those that encourage managers to direct their firms to behave in more cooperative ways.

Keywords

competitionmultimarketmutual forbearancerivalrygame theory
Type
Research Article
Information
Journal of Management & Organization , Volume 19 , Issue 2 , March 2013 , pp. 115 - 133
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2013 

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