Abstract: A broad literature in strategy examines how competitors’ presence affects a focal firm’s strategic decision making. This stream of research identifies imitation and deterrence as two distinct patterns, and concludes with an inverted U-shaped relationship. We propose in this study that under environmental uncertainty competition could both strengthen and undermine the benefits of imitation, and consequently lead to a U-shaped relationship. Using data on the U.S. electric utility companies’ commitment to develop utility-scale solar projects, we find empirical evidence consistent with our predictions.

Abstract: We report an empirical methodology that tests the central assumption of market positions: their immutability. We use the threat of Southwest entry into an air travel route and compare the responses of firms in the same position as Southwest to the responses of firms in a different position. We find that, (1) full service carriers (FSCs) reduce prices and increase capacity whereas low cost carriers (LCCs) increase prices and reduce capacity; (2) both FSCs and LCCs reduce flight duration but experienced increased delays, though the effect is stronger for the former; the FSCs also increase their first class seats and economy class seats respectively and reduce their business class seats, whereas the LCCs reduce their seats in all classes; (3) FSCs increase their day flights while the LCCs reduce both day and night flights. These results challenge the theoretical expectation that interdependence is stronger across market positions than within.

Abstract: We examine how surviving firms respond to the exit of rivals by using two levers, product variety adjustment and new store opening. Using a unique data set that contains all Best Buy stores in the US in 2006 and 2010, we find that after the full exit of Circuit City, Best Buy increased its store-level product variety and the magnitude of increase is greater in colocated markets (i.e., where Circuit City used to be colocated with Best Buy) than in non-colocated markets (i.e., where Circuit City used to be distant). Moreover, Best Buy were more likely to open new stores in non-colocated markets, and the magnitude of product variety increase diminishes with the opening of new stores in these non-colocated markets.

Abstract: We analyze theoretically and empirically the impact of exogenous changes in competition in one side of a two-sided market on the optimal pricing of both sides. We consider both its positive impact through enhanced indirect network externalities and its negative impact on same side agents because of higher competitive pressures. We test our hypothesis in the context of the U.S. airport industry exploiting an exogenous change in competition driven by a regulatory change. Consistent with our hypotheses, we estimate that an increase of within airport airline competition increases commercial revenues per passenger. This increase only takes place in airports that adopt a platform business model. We also investigate the impact of passengers through with both sides of the airport are connected.