Dynamics of Competitive Rivalry

This energetic lecture consist of a paper fight and another exercise to provide background, methodology, and findings from research that has empirically examined competitive dynamics. Foundational to this stream of research are several literatures including game theory and the Structure-Conduct-Performance paradigm. Unlike these literatures, however, research in competitive dynamics directly measures and analyzes firm action and rival action using a methodology of examining competitive actions identified through a structured content analysis of newspapers and trade magazines for firms in an industry. This robust methodology has enabled better understanding of competitive dynamics and the outcomes of this rivalry. It also has very practical implications. Thus, students also do an exercise in which they analyze actual competitive data between Coke and Pepsi to illustrate differences in their competitive behavior and the strengths and weaknesses of each of their approaches.