Abstract
We conducted an experimental simulation to examine the impact of interfirm mobility on managerial time horizons. Subjects played the role of firm members in a market consisting of several firms between which there existed the possibility of mobility. Within each firm, over several rounds of play, subjects negotiated how much to withdraw of a limited fund. Funds not withdrawn received a positive expected return. We manipulated two variables: the rate of interfirm mobility, and subjects′ prior knowledge of whether they would change firms. Both factors significantly influenced withdrawals. High interfirm mobility led to high rates of withdrawal; prior knowledge of mobility decreased withdrawals. The empirical results are interpreted in terms of their connection to prior research on social dilemmas and group negotiations.
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