Experiential Learning, Competitive Selection, and Downside Risk: A New Perspective on Managerial Risk Taking

Published Online:https://doi.org/10.1287/orsc.2017.1149

References

  • Agrawal J, Kamakura W (1995) The economic worth of celebrity endorsers: An event study analysis. J. Marketing 59(3):56–62.CrossrefGoogle Scholar
  • Argote L, Miron-Spektor E (2011) Organizational learning: From experience to knowledge. Organ. Sci. 22(5):1123–1137.LinkGoogle Scholar
  • Argote L, Beckman S, Epple D (1990) The persistence and transfer of learning in industrial settings. Management Sci. 36(2):140–154.LinkGoogle Scholar
  • Åstebro T, Mata J, Santos-Pinto L (2015) Skewness seeking: Risk loving, optimism or overweighting of small probabilities? Theory Decision 78(2):189–208.CrossrefGoogle Scholar
  • Asthana S, Balsam S (2010) The impact of changes in firm performance and risk on director turnover. Rev. Accounting Finance 9(3):244–263.CrossrefGoogle Scholar
  • Augier M, March J, Marshall A (2015) The flaring of intellectual outliers: An organizational interpretation of the generation of novelty in the RAND Corporation. Organ. Sci. 26(4):1140–1161.LinkGoogle Scholar
  • Azzalini A (2005) The skew-normal distribution and related multivariate families. Scandinavian J. Statist. 32(2):159–188.CrossrefGoogle Scholar
  • Baldwin C, von Hippel E (2011) Modeling a paradigm shift: From producer innovation to user and open collaborative innovation. Organ. Sci. 22(6):1399–1417.LinkGoogle Scholar
  • Barnett W (1997) The dynamics of competitive intensity. Admin. Sci. Quart. 42(1):128–160.CrossrefGoogle Scholar
  • Barnett W, McKendrick D (2004) Why are some organizations more competitive than others? Evidence from a changing global market. Admin. Sci. Quart. 49(4):535–571.Google Scholar
  • Baum J, Ingram P (1998) Survival-enhancing learning in the Manhattan hotel industry, 1898–1980. Management Sci. 44(7):996–1016.LinkGoogle Scholar
  • Benkard C (2000) Learning and forgetting: The dynamics of aircraft production. Amer. Econom. Rev. 90(4):1034–1054.CrossrefGoogle Scholar
  • Benson D, Ziedonis R (2009) Corporate venture capital as a window on new technologies: Implications for the performance of corporate investors when acquiring startups. Organ. Sci. 20(2):329–351.LinkGoogle Scholar
  • Bowman E (1980) A risk/return paradox for strategic management. Sloan Management Rev. 21(3):17–31.Google Scholar
  • Burgos A (2002) Learning to deal with risk: What does reinforcement learning tell us about risk attitudes? Econom. Bull. 4(10):1–13.Google Scholar
  • Burt R (2009) Structural Holes: The Social Structure of Competition (Harvard University Press, Cambridge, MA).Google Scholar
  • Busemeyer J (1985) Decision making under uncertainty: A comparison of simple scalability, fixed-sample, and sequential-sampling models. J. Experiment. Psych.: Learn. Memory, Cognition 11(3):538–564.CrossrefGoogle Scholar
  • Bush R, Mosteller F (1955) Stochastic Models for Learning (John Wiley & Sons, Hoboken, NJ).CrossrefGoogle Scholar
  • Carroll G, Hannan M (2000) The Demography of Corporations and Industries (Princeton University Press, Princeton, NJ).CrossrefGoogle Scholar
  • Carroll G, Harrison J (1994) On the historical efficiency of competition between organizational populations. Amer. J. Sociol. 100(3):720–749.CrossrefGoogle Scholar
  • Chu S, Keh H (2006) Brand value creation: Analysis of the interbrand-business week brand value rankings. Marketing Lett. 17(4):323–331.CrossrefGoogle Scholar
  • Cochrane J (2005) The risk and return of venture capital. J. Financial Econom. 75(1):3–52.CrossrefGoogle Scholar
  • Cyert R, March J (1963) A Behavioral Theory of the Firm (Prentice Hall, Upper Saddle River, NJ).Google Scholar
  • Denrell J (2003) Vicarious learning, undersampling of failure, and the myths of management. Organ. Sci. 14(3):227–243.LinkGoogle Scholar
  • Denrell J (2007) Adaptive learning and risk taking. Psych. Rev. 114(1):177–187.CrossrefGoogle Scholar
  • Denrell J (2008) Organizational risk taking: Adaptation versus variable risk preferences. Indust. Corporate Change 17(3):427–466.CrossrefGoogle Scholar
  • Denrell J, March J (2001) Adaptation as information restriction: The hot stove effect. Organ. Sci. 12(5):523–538.LinkGoogle Scholar
  • Easterby-Smith M, Crossan M, Nicolini D (2000) Organizational learning: Debates past, present and future. J. Management Stud. 37(6):783–796.CrossrefGoogle Scholar
  • Eeckhoudt L, Schlesinger H (2006) Putting risk in its proper place. Amer. Econom. Rev. 96(1):280–289.CrossrefGoogle Scholar
  • Elberse A (2008) Should you invest in the long tail? Harvard Bus. Rev. 86(7/8):88–96.Google Scholar
  • Erev I, Barron G (2005) On adaption, maximization, and reinforcement learning among cognitive strategies. Psych. Rev. 112(4):912–931.CrossrefGoogle Scholar
  • Fiegenbaum A, Thomas H (1988) Attitudes toward risk and the risk-return paradox: Prospect theory explanations. Acad. Management J. 31(1):85–106.CrossrefGoogle Scholar
  • Fishburn P (1977) Mean-risk analysis with risk associated with below-target returns. Amer. Econom. Rev. 67(2):116–126.Google Scholar
  • Gates WH (1999) Business @ the Speed of Thought: Using a Digital Nervous System (Warner Books, Inc., New York).CrossrefGoogle Scholar
  • Gimeno J, Folta T, Cooper A, Woo C (1997) Survival of the fittest? Entrepreneurial human capital and the persistence of underperforming firms. Admin. Sci. Quart. 42(4):750–783.CrossrefGoogle Scholar
  • Gómez-Mejía L, Haynes K, Núez-Nickel M, Jacobson K, Moyano-Fuentes J (2007) Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Admin. Sci. Quart. 52(1):106–137.CrossrefGoogle Scholar
  • Hannan M, Carroll G (1992) Dynamics of Organizational Populations: Density, Legitimation, and Competition (Oxford University Press, Oxford, UK).CrossrefGoogle Scholar
  • Hannan M, Freeman J (1977) The population ecology of organizations. Amer. J. Sociol. 82(5):929–964.CrossrefGoogle Scholar
  • Haruvy E, Erev I (2001) On the application and interpretation of learning models. Zwick R, Rapoport A, eds. Experimental Business Research (Springer, New York), 285–300.Google Scholar
  • Kahneman D, Tversky A (1979) Prospect theory: An analysis of decision under risk. Econometrica 47(2):263–291.CrossrefGoogle Scholar
  • Koonce L, McAnally M, Mercer M (2005) How do investors judge the risk of financial items? Accounting Rev. 80(1):221–241.CrossrefGoogle Scholar
  • Köszegi B, Rabin M (2006) A model of reference-dependent preferences. Quart. J. Econom. 121(4):1133–1165.CrossrefGoogle Scholar
  • Lant T (1992) Aspiration level adaptation: An empirical exploration. Management Sci. 38(5):623–644.LinkGoogle Scholar
  • Lant T (1994) Computer simulations of organizations as experimental learning systems: Implications for organization theory. Carley K, Prietula M, eds. Computational Organization Theory (Erlbaum Associates, Hillsdale, NJ), 195–216.Google Scholar
  • Lant T, Mezias S (1992) An organizational learning model of convergence and reorientation. Organ. Sci. 3(1):47–71.LinkGoogle Scholar
  • Lazear E, Rosen S (1981) Rank-order tournaments as optimum labor contracts. J. Political Econom. 89(5):841–864.CrossrefGoogle Scholar
  • Levinthal D (1991a) Organizational adaptation and environmental selection: Interrelated processes of change. Organ. Sci. 2(1):140–145.LinkGoogle Scholar
  • Levinthal D (1991b) Random walks and organizational mortality. Admin. Sci. Quart. 36(3):397–420.CrossrefGoogle Scholar
  • Levinthal D (1997) Adaptation on rugged landscapes. Management Sci. 43(7):934–950.LinkGoogle Scholar
  • Levinthal D, March J (1981) A model of adaptive organizational search. J. Econom. Behav. Organ. 2(4):307–333.CrossrefGoogle Scholar
  • Levinthal D, March J (1993) The myopia of learning. Strategic Management J. 14(S2):95–112.CrossrefGoogle Scholar
  • Levitt B, March J (1988) Organizational learning. Annual Rev. Sociol. 14(August):319–340.CrossrefGoogle Scholar
  • Lim E, McCann B (2014) Performance feedback and firm risk taking: The moderating effects of CEO and outside director stock options. Organ. Sci. 25(1):262–282.LinkGoogle Scholar
  • MacGillivray H (1981) The mean, median, mode inequality and skewness for a class of densities. Australian New Zealand J. Statist. 23(2):247–250.Google Scholar
  • Mao J (1970) Survey of capital budgeting: Theory and practice. J. Finance 25(2):349–360.CrossrefGoogle Scholar
  • March J (1991) Exploration and exploitation in organizational learning. Organ. Sci. 2(1):71–87.LinkGoogle Scholar
  • March J (1996) Learning to be risk averse. Psych. Rev. 103(2):309–319.CrossrefGoogle Scholar
  • March J, Shapira Z (1987) Managerial perspectives on risk and risk taking. Management Sci. 33(11):1404–1418.LinkGoogle Scholar
  • March J, Shapira Z (1992) Variable risk preferences and the focus of attention. Psych. Rev. 99(1):172–183.CrossrefGoogle Scholar
  • Markowitz H (1952) Portfolio selection. J. Finance 7(1):77–91.Google Scholar
  • Menezes C, Geiss C, Tressler J (1980) Increasing downside risk. Amer. Econom. Rev. 70(5):921–932.Google Scholar
  • Mezias S, Lant T (1994) Mimetic learning and the evolution of organizational populations. Baum J, Singh J, eds. The Evolutionary Dynamics of Organizations (Oxford University Press, Oxford, UK), 53–78.Google Scholar
  • Miller K, Chen WR (2004) Variable organizational risk preferences: Tests of the March–Shapira model. Acad. Management J. 47(1):105–115.CrossrefGoogle Scholar
  • Miller K, Leiblein M (1996) Corporate risk-return relations: Returns variability versus downside risk. Acad. Management J. 39(1):91–122.CrossrefGoogle Scholar
  • Miller K, Reuer J (1996) Measuring organizational downside risk. Strategic Management J. 17(9):671–691.CrossrefGoogle Scholar
  • Nelson R, Winter S (1982) An Evolutionary Theory of Economic Change (Harvard University Press, Cambridge, MA).Google Scholar
  • Noussair C, Trautmann S, van de Kuilen G (2014) Higher-order risk attitudes, demographics, and financial decisions. Rev. Econom. Stud. 81(1):325–355.CrossrefGoogle Scholar
  • Oyarzun R, Sarin R (2013) Learning and risk aversion. J. Econom. Theory 148(1):196–225.CrossrefGoogle Scholar
  • Parrino R (1997) CEO turnover and outside succession: A cross-sectional analysis. J. Financial Econom. 46(2):165–197.CrossrefGoogle Scholar
  • Rhee M, Kim T (2014) Great vessels take a long time to mature: Early success traps and competences in exploitation and exploration. Organ. Sci. 26(1):180–197.LinkGoogle Scholar
  • Ross D (2014) Taking a chance: A formal model of how firms use risk in strategic interaction with other firms. Acad. Management Rev. 39(2):202–226.CrossrefGoogle Scholar
  • Rothschild M, Stiglitz J (1970) Increasing risk: I. A definition. J. Econom. Theory 2(3):225–243.CrossrefGoogle Scholar
  • Scherer F, Harhoff D (2000) Technology policy for a world of skew-distributed outcomes. Res. Policy 29(4):559–566.CrossrefGoogle Scholar
  • Smith W, Tushman M (2005) Managing strategic contradictions: A top management model for managing innovation streams. Organ. Sci. 16(5):522–536.LinkGoogle Scholar
  • Sutton R, Barto A (1998) Reinforcement Learning: An Introduction (MIT Press, Cambridge, MA).Google Scholar
  • Tong T, Li Y (2011) Real options and investment mode: Evidence from corporate venture capital and acquisition. Organ. Sci. 22(3):659–674.LinkGoogle Scholar
  • Van de Ven A, Polley D, Garud R, Venkataraman S (1999) The Innovation Journey (Oxford University Press, Oxford, UK).Google Scholar
  • Van Valen L (1973) A new evolutionary law. Evolutionary Theory 1(July):1–30.Google Scholar
  • von Hippel P (2005) Mean, median, and skew: Correcting a textbook rule. J. Statist. Ed. 13(2).Google Scholar
  • Wadhwa A, Kotha S (2006) Knowledge creation through external venturing: Evidence from the telecommunications equipment manufacturing industry. Acad. Management J. 49(4):819–835.CrossrefGoogle Scholar
  • Wiseman R, Gomez-Mejia L (1998) A behavioral agency model of managerial risk taking. Acad. Management Rev. 23(1):133–153.CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.