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| Author: | Bonardi, J-P. |
| Title: | Global and political strategies in deregulated industries: the asymmetric behaviors of former monopolies |
| Journal: | Strategic Management Journal
2004 : FEB, VOL. 25:2, p. 101-120 |
| Index terms: | Industries Monopoly Strategy Deregulation Game theory Models |
| Language: | eng |
| Abstract: | Former monopolies often adopt asymmetric behaviours in deregulated industries: these firms impede the entry of foreign competitors in their home market, especially using defensive political strategies, and, aggressively developing international strategies in foreign markets at the same time. This paper develops a game theoretic model involving three players: the former monopoly, its home government, and the host government of the country into which the firm wants to enter. First it is shown that there are different asymmetric strategies that former monopolies can use, and that a global strategy cannot always be implemented by those firms because of cooperation issues. The conditions under which these issues can be solved are also studied; it is shown that this can only happen when the firm develops a political strategy integrating both defensive and offensive activities. Overall, this paper therefore argues that asymmetric strategies are not always adopted to maintain monopoly rents but are also dictated by the nature of the international relationships btw. the governments involved. |
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