Competitive environments and protective behavior

The class of two-person competition games is introduced and analyzed. For any game in this class the set of Nash equilibria is convex and all Nash equilibria lead to the same payoff vector. Competition games are compared to other competitive environments such as unilaterally competitive games and rivalry games. Moreover, protective behavior within competitive environments is analyzed. For matrix games it is known that protective strategies profiles exactly correspond to proper equilibria. It is shown that this result can be extended to the class of unilaterally competitive games.     

Endogenous coalition formation in contests

This paper analyzes coalition formation in a model of contests with linear costs. Agents first form groups and then compete by investing resources. Coalitions fight for a prize that is assumed to be subject to rivalry, so its value is non-increasing in the size of the group that obtains it. This formulation encompasses as particular cases some models proposed in the rent-seeking literature. We show that the formation of groups generates positive spillovers and analyze two classes of games of coalition formation. A contest among individual agents is the only stable outcome when individual defections leave the rest of the group intact. More concentrated coalition structures, including the grand coalition, are stable when groups collapse after a defection, provided that rivalry is not too strong. Results in a sequential game of coalition formation suggest that there exists a non-monotonic relationship between the level of underlying rivalry and the level of social conflict.

“If men were supplied with every thing in the same abundance, justice and injustice would be equally unknown among mankind.” David Hume (1740), A Treatise of Human Nature

I thank Luis Corchón, Joan Esteban, Michelle Garfinkel and József Sákovics for their comments and suggestions on the paper.     

On the social structure of markets

Economic theorists have seldom discussed the social structuresbehind markets, even though market trading relies heavily onseller/buyer roles and personal relations among traders. Thispaper considers the structural basis of markets and proposesa layered approach which accommodates a wide range of competitiveand relational trade within a definition of markets that distinguishesthem from non-market exchange. Giving due regard to social structureslays bare the institutional character of markets and providesa rationale for case studies of how particular markets function.     

Clusters and rivalry: does localization really matter?

This exploratory study addresses the link between rivalry—which we regard as a cognitive social dimension of competition— and localization. We adopt a visual-mapping technique to collect data on firms belonging to the packaging-machinery geographical cluster in Northern Italy.We can summarize our results as follows. Entrepreneurs identifying rivals within the cluster also tend to cite a larger number of rivals altogether. A firm's proximity to its rivals is a key to a deeper comparison with them. Geographical distance represents a tool for scanning the competitive environment; it is not used as a criterion by which to classify rivalry. From these results, we generate a few propositions that shed a new light on the relationship between rivalry and localization.     

Location strategies of multiunit service businesses: spatial differentiation and agglomeration among hamburger restaurants in Paris, 1984–2004

In this article, we study how multiunit service businesses locate their units, choosing between two opposite spatial strategies. Whereas, locating one’s units close to competitors’ brings positive agglomeration externalities, locating one’s units far away from others’ allows local monopolies through spatial differentiation. We examine location strategies of the two biggest hamburger restaurant chains—namely McDonald’s and Quick—in Paris between 1984 and 2004. Results show that competitive standings impact locational strategy choices. The market leader favors spatial differentiation, thus preempting premium locations. Conversely, the challenger favors locations close to the leader, thus aiming at agglomeration externalities.

Together we share? Competitive and collaborative supplier interests in product development

While supplier involvement in product development projects can contribute with valuable knowledge and expertise, such involvement also poses organizational and managerial challenges, particularly if several rival suppliers are involved. This paper explores these challenges in the wind turbine industry, based on two interrelated Danish case studies. The analysis results in three propositions regarding how supplier rivalry and technological specialization influences roles, coordination patterns and communication between actors in distributed product development projects.     

Reprint of “Linking rival and stakeholder pressure to green supply management: Mediating role of top management support”

Drawing upon the Schumpeterian view of competition and stakeholder theory, the purpose of our study is to examine how issues of rivalry and stakeholder pressure motivate firms to implement green supply management practices. We also consider the role of top management support as an important enabler to how firms react to competitive pressures to pursue green supply management practices. Our model is tested using a sample of supply chain professionals. Our results indicate that environmental pressure from rivals and stakeholders influences green supply management implementation through the mediating role of top management support for environmental initiatives.