Global and political strategies in deregulated industries: the asymmetric behaviors of former monopolies
Article first published online: 4 NOV 2003
Copyright © 2003 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 25, Issue 2, pages 101–120, February 2004
How to Cite
Bonardi, J.-P. (2004), Global and political strategies in deregulated industries: the asymmetric behaviors of former monopolies. Strat. Mgmt. J., 25: 101–120. doi: 10.1002/smj.367
- Issue published online: 24 DEC 2003
- Article first published online: 4 NOV 2003
- Manuscript Accepted: 16 JUL 2003
- Manuscript Received: 8 MAR 2001
- game theory;
- political strategies;
- global strategies;
In deregulated industries former monopolies often adopt asymmetric behaviors: these firms impede the entry of foreign competitors in their home market, especially using defensive political strategies, and, at the same time, aggressively develop international strategies in foreign markets. To account for this behavior, I develop 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. I show first that there are in fact different asymmetric strategies that former monopolies can use in such a setting, and that a global strategy cannot always be implemented by those firms because of cooperation issues between the two governments. I also study the conditions under which these issues can be solved and show that this can happen only when the firm develops a political strategy that integrates 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 between the governments involved. Copyright © 2003 John Wiley & Sons, Ltd.