Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/84999
Authors: 
Engel, Christoph
Ockenfels, Axel
Year of Publication: 
2013
Series/Report no.: 
Preprints of the Max Planck Institute for Research on Collective Goods 2013/14
Abstract: 
Antitrust authorities all over the world are concerned if a particularly aggressive competitor, a maverick, is bought out of the market. One plausible determinant of acting as a maverick is behavioral: the maverick derives utility from acting competitively. We test this conjecture in the lab. In a pretest, we classify participants by their social value orientation. Individuals who are rivalistic in an allocation task indeed bid more aggressively in a laboratory oligopoly market. Yet we also observe that the suppliers' willingness to pay to buy the maverick out of the market is much smaller than the gain from doing so. Again, rivalry contributes to the phenomenon: a supplier who buys out the maverick would fall behind the remaining competitor in terms of profits, which does not seem acceptable to most suppliers.
Subjects: 
oligopoly
aggressive sales
maverick
merger
buyout
social value orientation
rivalry
JEL: 
D43
K21
L13
L41
C91
D03
D22
Document Type: 
Working Paper

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