Organizational Learning as Credit Assignment: A Model and Two Experiments

We outline a theoretical model of organizational learning curves to account for the empirical regularities observed in the literature. The learning mechanism in our model is the gradual recognition of important stepping stones to achieving the goal. As organizations gain experience, they discover the appropriate actions to take at each stage and reduce the number of the steps it takes to reach the final outcome. Using both simulation and human subject experiments, we show that this model accounts for existing empirical regularities related to the learning curves, variations in learning rates, and organizational adaptation to new environments.