We examine the phenomenon of escalation from an economist's perspective, emphasizing explanations which do not rule out rational behavior on the part of firms or agents. We argue that escalation cannot be established as a separate phenomenon unless these possible alternative explanations are...

We explore the influence of tacit routines in obtaining coordination. Our experiment uses simple laboratory firms, in which we interfere with one kind of firm's ability to develop tacit routines. Thus, our firms vary in the degree to which they rely on this kind of knowledge - instead of other,...