Mutual forbearance among multimarket firms: A behavioral approach to tacit cooperation

Emerging empirical evidence has noted that multimarket firms may not always behave in ways that are consistent with their multimarket positions. Assuming multimarket ties between firms exists that are sufficient to permit tacit agreement among them to refrain from aggressive competition, we describe how additional factors are likely to affect the decision of managers of multimarket firms to abide by such an agreement. In particular, we focus on factors that are likely to make the negative consequences of violating a tacit agreement of mutual forbearance more salient and those that encourage managers to direct their firms to behave in more cooperative ways.