Each year, millions of new business are born (or started), while millions of businesses fail as well – in fact, the majority fails within their first five years. Although economic factors seem to explain some of this excessive business up-building, factors tied to the decision makers of those business are likely to affect these rates as well. The persevering market players, on the other hand, have several levers to apply to affect entry rates, as literature discussed for the past decades (e.g., see the taxonomy by Fudenberg & Tirole, 1984). Interestingly, studies investigating the application of these theory-based strategies – when facing entry – yielded mixed results. While experimental studies did not examine market entry settings against established personality frameworks, equivalent efforts in other game theoretic settings (e.g., prisoner’s dilemma) yielded promising results, suggesting that personality seems to account for some of the heterogeneity in observed behaviours.
In order to derive potential hypotheses, this thesis leveraged findings from the field of conflict management (and its dual-concern-model (Blake & Mouton, 1964)) and the different resolution styles that have been identified and linked to personality dimensions (e.g., Antonioni, 1998). ... mehrSubsequently, propositions for entry behaviour (for the Incumbent and Entrant) were hypothesised for three main dimension categories: conflict-seeking, harmony-seeking and action-seeking traits. In order to ensure reliable results, the underlying inventories were carefully selected based on their statistical reliability (i.e., the HEXACO model, Aggression Questionnaire, and 16PF Inventory). The experiment has been conducted in a simulated laboratory with monetary compensation to ensure external validity of the study. The ~200 participants completed a personality questionnaire before playing (anonymously) market entry games against each other. The respective results were analysed using descriptive, univariate and multivariate analyses, including the logistic regression model for the investment and entry decisions.
Results do support the initial hypothesis that certain personality dimensions, e.g., conflict-seeking dimensions, affect behaviour in market entry games. While the effect of harmony-seeking dimensions has been minimal for both Incumbent and Entrant roles, aggression (conflict-seeking) seems to restrain goodwill behaviour by the Incumbent in settings where it would be beneficial to do so, but intensifies non-cooperative behaviour in settings where it is beneficial to do so. For the Entrant behaviour, extraversion and openness-to-experience (both action-seeking) seem to drive market entry, the latter even seems to drive entry in contexts where – when assuming rational Nash-Equilibrium play in the post-entry period – it would not be worthwhile to enter. The inconsistency of the results, i.e., personality dimensions affecting behaviour in some situations, while not affecting it in others, does support hitherto findings that personality affecting behaviour does depend – to some extent – on the situational setting (Pothos, et al., 2011).