The impact of marketing signals on strategic decision‐making ability and profitability

Examines the power of market signalling through a market simulation. Finds that use of marketing signals by firms within an industry is positively related to the profitability of the industry and the profits of the individual firms within the industry. The marginal contribution by the addition of another signaller to the industry is significant. However, there is a negative incentive for a firm to be the only signaller within an industry. This “lone man out”phenomenon puts a firm at a competitive disadvantage to the other firms within its industry. A “temporal pattern recognition deficiency” also seems to exist which inhibits managers from finding patterns of behaviour over time.