NONRESPONSE AND DELAYED-RESPONSE TO COMPETITIVE MOVES - THE ROLES OF COMPETITOR DEPENDENCE AND ACTION IRREVERSIBILITY

Competitive moves that are unchallenged or to which response is delayed are important weapons in a strategist's arsenal, so variables that discourage or delay response are of great interest. Using a game theoretic framework, this study investigated the effects on dimensions of competitive response of competitor dependence on a market under attack and the irreversibility of an aggressor's move. The hypothesized relationships were tested with data on competitive moves by U.S. airlines. The results suggest that competitor dependence depresses chances of nonresponse and increases response delay and the likelihood that a responder will match a move. Action irreversibility generally has the opposite effect. In addition, the interaction of competitor dependence and action irreversibility is significant. Analyses of the performance implications of competitive exchange indicated that attackers and early responders gain market share at the expense of late responders and nonresponders.