Reflexive and Selective Competitive Behaviors—Inertia, Imitation, and Interfirm Rivalry

ABSTRACTCompetitive dynamics research has established the important impact that the level of firm competitive activity has on rival response and firm performance. Less understood, however, are inputs that influence firm activity, specifically, the extent to which firms reflexively repeat prior activity versus selectively taking actions. Drawing from the awareness–motivation–capability framework, we develop and test theory that firm decision makers are not only predisposed to behave reflexively, but are also influenced by contextual factors, suggesting cognitive selection. Utilizing a longitudinal sample of marketing activity of 58 firms and 2,164 firm–rival dyads in 11 industries, we find that firms undertake both reflexive and selective competitive processes. Positive effects of prior levels of activity are moderated by the firm’s own prior performance, as well as the rivals’ similarity and industry standing.