triadic-mmc

Beyond Dyads: How Triadic Multimarket Contact Shapes Competition in Digital Markets Abstract. Research on multimarket competition typically explains mutual forbearance (i.e., reduced competitive aggressiveness) as the result of repeated contacts between pairs of firms in multiple markets. While this has been well supported by markets with stable boundaries, digital markets challenge this view because market boundaries and rivals are not fixed. We argue that competitive restraint in such setting arises not from dyadic multimarket contact (MMC) but from firms’ shared competitors. That is, when a firm is a part of triadic MMC, a firm’s embeddedness in closed triads of MMC ties, aggressive actions toward one competitor are likely to provoke responses from others, which discourages escalation. Using a longitudinal dataset on firms in the IT sector from 2010 to 2016 and a stochastic actor-oriented model, we find that firms embedded in more triadic MMC exhibit lower levels of competitive aggressiveness, consistent with mutual forbearance, while dyadic MMC has no such effect. We also show that these triadic structures are unstable as shared competitors keep changing. These findings suggest that mutual forbearance in digital markets is best understood as a network-level outcome rather than a dyadic one. Keywords: multimarket competition, triadic multimarket contact, stochastic actor-oriented model, mutual forbearance, digital market