DETERRENCE, REPUTATIONS, AND COMPETITIVE COGNITION

This study examines an aspect of competitive interactions that has att racted increasing research attention: the relationship between deterre nce and competitive reputations. We build a conceptual model of the an tecedents and consequences of a firm's reputation for being a credible defender of its markets. Theory and limited empirical evidence sugges ts a firm with this reputation should deter competitive attacks agains t it. We explore how a manager's competitive cognition about her oppon ents' (1) patterns of activity in the marketplace and (2) previous suc cess can lead her to perceive a competitor as a credible defender. We test the framework using MBA students in a quasi-field setting, the Ma rkstrat2 simulation game. The results of this study suggest that reput ation deters attack only when the potential attacker considers the tar get firm a minor competitor. Managers consider defenders that have pre viously been successful as credible defenders of their markets. They a lso weigh consistency of activity relative to industry average in maki ng inferences about credibility. The study indicates that the deterren ce-reputation link is more complex than previous theory and evidence m ight imply, and suggests considerable promise for a psychological appr oach to examining competitive interactions.