occurs when firms meet the same rivals in multiple markets. When firms compete with each other in more than one market their competitive behavior may differ from that of single-market rivals. Multimarket competition may result in the reduction of the competitive intensity among rivals, an effect known as mutual forbearance.
Multimarket contact gives a firm the option to respond to actions or attacks by a rival not only in the market being challenged, but also in other markets where they both compete. As a result, multimarket competitors may hesitate to attack in one market for fear of retaliation in other markets.
- Gimeno, Javier; Woo, Carolyn (1999). "Multimarket contact, economies of scope, and firm performance". Academy of Management Journal 43 (3): 239–259.
- Yu, Tieying; Cannella, Alberta (2007). "Rivalry between multinational enterprises: an event history approach". Academy of Management Journal 50 (3): 665–686.