Despite a growing number of cartel dissolutions over the past decades, little is known about how non-cartel firms strategically respond to their rivals’ cartel dissolutions. This study adopts a question-driven, abductive approach to investigate this phenomenon by analyzing new product introductions by U.S. non-cartel firms. We find that non-cartel firms reduce their new product introductions following their rivals’ cartel dissolutions. A series of post-hoc analyses reveals that this effect is driven by a weakened motivation to differentiate—non-cartel firms perceive their rivals’ cartel dissolutions as a reduction in competitive pressure, which diminishes their incentive to differentiate from the former cartel members to survive the market competition. This study contributes to competitive strategy research by documenting an unintended responsive action by non-cartel firms to cartel dissolutions.
