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 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.
Organisational Behaviour and Human Resources
Montgomery, David B. and Clark, B.H..
Deterrence, Reputations, and Competitive Cognition. (1998). Management Science. 44, (1), 62-82. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/2310