In contrast to the traditional approach that typically views entry solely as a threat, we argue that our understanding of this important phenomenon will remain incomplete until we consider the possibility that entry may also provide opportunity for incumbent firms. Drawing from agglomeration theory, which describes the benefit from colocating with competitors, we explicitly examine the combined impact of the competitive and agglomeration effects of entry using a unique dataset of Texas hotels. We find that incumbent establishments price higher when facing entrants whose agglomeration benefits are more likely to outweigh their competitive effects. This association is stronger for incumbents that have greater experience with entry. Our results bring a new perspective to the entry response literature helping clarify inconsistent empirical results. Further, we apply agglomeration theory to a new question, incumbent behavior, and demonstrate that experience appears to play an important role in recognizing situations that generate agglomeration externalities. Copyright © 2009 John Wiley & Sons, Ltd.

JAVIER GIMENO INSEADThis study investigates how differences in ownership form-between franchised and company-owned units-affect managerial incentives and competitive pricing in different oligopolistic contexts. We argue that chains may restrict decision making in company-owned units as a commitment device to maintain high prices in concentrated markets and found evidence consistent with this argument. We also found that a unit's ownership form affected its rivals' competitive behavior. Our results indicate that company-owned units' ability to raise their own and rivals' prices in highly concentrated markets led to their higher performance relative to franchised units. pants at the SMS, AOM, CCC, and Harvard Strategy conferences, and seminar participants at HEC, the University of Amsterdam, Erasmus University, and Tilburg University for their helpful comments. We also appreciate the help of Source Strategies, Inc., and the Texas Comptroller's Office for their support with data-related issues. We would like to thank Associate Editor Amy Hillman and the three anonymous reviewers for their valuable feedback and suggestions, which helped improve the article significantly.1 As used here, "managerial incentives" rests on the assumption that managers make economically rational decisions that maximize their payoffs. These incentives thus include, but are not limited to, incentive or bonus plans.

This article explores an important but less understood part of the nascent entrepreneurial process, the changes that occur to beliefs associated with continuing evaluation of the opportunity and related learning. Using samples from the Panel Study of Entrepreneurial Dynamics, we demonstrate that engaging in planning activities by nascent entrepreneurs as they proceed through the process is associated with a decrease in perceptions of environmental uncertainty but an increase in perceived individual self-efficacy and business performance expectations. Overall, our evidence is consistent with a dynamic view of the nascent stage of the entrepreneurial process characterized by ongoing significant changes in beliefs.

We analyze the effect of managerial compensation schemes and organizational structure on competitive behavior in imperfectly competitive product markets. Previous research suggests that in cases of strategic substitutability, firms tend to choose organizational structures and compensation systems that commit the firm to behaving aggressively in the product market, reducing firm and industry profits. In contrast, we show that while compensation and structure in isolation lead to excessive aggressiveness, the combination of these two internal choice variables may reverse the outcome--organizational design can be used as a commitment device to reduce competitive rivalry. Finally, we find that in equilibrium, firms may choose to be different; one firm is decentralized and uses incentives that commit it to being aggressive, while the other is centralized and uses incentives that commit it to being soft. Hence, endogenous firm heterogeneity in the form of organizational differentiation allows firms to avoid a mutually detrimental outcome.incentives, strategic delegation, organizational design, competitive strategy

The relationship between psychological pressure and performance outcomes has been studied across a variety of sporting contexts. As an extension and complement to recent empirical studies, we construct a formal model of soccer penalty shoot-outs to determine the links between psychological pressure and first-mover advantage (FMA). Our approach indicates that even seemingly simple competitive interactions may include a rich, complex set of effects. We demonstrate that psychological pressure leads to FMA in shoot-outs; however, we show that this relationship can vary depending on a variety of different factors, such as the nature of the pressure, the magnitude of the pressure, and the specific rules governing the shoot-out. Overall, our work clarifies and extends knowledge of the operation of FMA and of how psychological pressure impacts performance outcomes in competitive interactions.