Trouble in store: Probes, protests, and store openings by Wal-Mart, 1998-2007

Abstract

The authors consider how uncertainty over protest occurrence shapes the strategic interaction between companies and activists. Analyzing Wal-Mart, the authors find support for their theory that companies respond to this uncertainty through a "test for protest" approach. In Wal-Mart's case, this consists of low-cost probes in the form of new store proposals. They then withdraw if they face protests, especially when those protests signal future problems. Wal-Mart is more likely to open stores that are particularly profitable, even if they are protested. This uncertainty-based account stands in sharp contrast to full-information models that characterize protests as rare miscalculations. © 2010 by The University of Chicago. All rights reserved.