This paper examines the variation in performance of incumbents and entrants following the deregulation of prices and entry in the airline industry. Our approach is similar to earlier studies of interfirm performance heterogeneity across industries. Drawing on theories of industry evolution, we hypothesize that the performance of entrants will have higher variance than incumbents. Further, given the opportunities offered by price deregulation, we propose that incumbents will have higher variance in performance under deregulation than in the earlier regime. The findings indicate that entrant performance heterogeneity is significantly greater than incumbent performance heterogeneity following deregulation, but that the variation in performance among incumbents does not significantly change when deregulation occurs. The second result is surprising given the range of service and process innovations that incumbents initiated. These results suggest that the distinction between entrants and incumbents is critical to future studies of performance variation within and across industries. Copyright © 2002 John Wiley & Sons, Ltd.

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Effective cross-cultural negotiations between firms in the United States and Chinahave become increasingly important as commerce between these two nations continues its rapid expansion. Previous research has explored some of the cultural factors that shape Chinese negotiating styles, making comparisons with American practices. However, scant attention has been paid to differences in perspectives that derive from fundamental logic paradigms, which tend to vary greatly between individuals from the East and West. We outline the primary features of two widely recognized logic frameworks-formal logic (which excludes contradictory notions about a concept or entity) and dialectic logic (which emphasizes contradiction and acknowledges the value of conflict between opposing ideas). Recognizing that formal logic is more common in the United States and that dialectic logic tends to dominate thought in China, we outline hypothesized influences of each logic paradigm on negotiating approaches in the two countries. Combining these insights with those derived from research on other relevant factors, we offer practical suggestions for managing interactions between American and Chinese negotiators.

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