In this study of firms' entries into and exits from each other's markets, we link research on multipoint competition to the emerging action-oriented, dyadic approach to interfirm rivalry by specifying market interdeepndencies between paris of firms that condtion their potential for rivalry over tiem. Our dynamic analysis of competitive itneractions between pairs of commuter airlines in California reveals the idiosyncratic and asymmetric market microstructures that characterized dyadic competitive relationships and help explain why firms grapple vigorously with some of their competiors while being passive toward others.
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