Hart Posen - Academia.edu (original) (raw)

Papers by Hart Posen

Research paper thumbnail of Learning-by-Participating: The Dynamics of Information Aggregation in Organizations

Social Science Research Network, 2019

Decision-making that leverages the collective knowledge of multiple individuals is ubiquitous in ... more Decision-making that leverages the collective knowledge of multiple individuals is ubiquitous in organizations, occurring in settings such as groups, committees, top management teams, and boards. Research has examined how decision-making structures (e.g., plurality voting) aggregate individuals’ beliefs into a single organizational choice. We argue that decision-making structures play another role beyond just aggregating individuals' beliefs — they also shape the learning of the individuals who participate in decision making. Learning-by-participating is distinct from learning-by-doing (i.e., experiential learning) in that individuals receive feedback not on their own choices, but rather on the choice made by the organization. We develop a theoretically grounded conceptual framework to characterize different decision-making structures, together with a computational model of organizational decision-making, to examine the impact of learning-by-participating across different such structures. We find that decision-making structures vary across two critical outcomes — their efficacy in aggregating information and their efficacy in shaping individual learning, and that these outcomes may be inversely related. Adjudicating among these two outcomes is the way in which organizations utilize the knowledge of organizational contrarians, individuals who favor choices that differ from that of the organization. A key implication is that the choice of a decision-making structure requires taking the learning context into account. Structures that are effective in settings where the potential for learning is limited may be less effective when individual learning is important. We discuss further implications for research on organizational decision making, learning, top management teams, and the wisdom of organizational crowds.

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Aspirations, Beliefs and a New Idea: Building on March’s Other Model of Performance Feedback

SSRN Electronic Journal

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Resource Allocation, Real Options, and Competitive Advantage: A Behavioral Approach

Academy of Management Proceedings

This paper develops a realistic real option theory of resource allocation decisions in strategic ... more This paper develops a realistic real option theory of resource allocation decisions in strategic factor markets. We build on extant financial and managerial theories, real option theories of decisi...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Reconceptualizing Imitation: Implications for Dynamic Capabilities, Innovation, and Competitive Advantage

Academy of Management Annals

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Uncertain Learning Curves: Implications for First-Mover Advantage and Knowledge Spillovers

Academy of Management Review, 2021

The existence of a learning curve in which a firm’s costs decline with cumulative experience sugg... more The existence of a learning curve in which a firm’s costs decline with cumulative experience suggests that early entry provides learning opportunities that create advantage by reducing future costs...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Artificial Intelligence and the Next Frontier of Organizational Modeling

Academy of Management Proceedings, 2019

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Resource Allocation in Strategic Factor Markets: A Realistic Real Options Approach to Generating Competitive Advantage

SSRN Electronic Journal, 2016

This paper develops a realistic real option theory of resource allocation decisions in strategic ... more This paper develops a realistic real option theory of resource allocation decisions in strategic factor markets. Competitive advantage in factor markets is underpinned by market failures that allow firms to acquire assets at less than their value in use. We recognize that market failure may result from uncertainty regarding the current and/or future value of an asset, which map, respectively, to uncertainty as modeled in the feedback learning and real options literatures. The realistic real option framework we develop grafts insights from the strategic factor market, feedback learning, and real option valuation literatures. We argue that competitive advantage may emerge not only from luck, or ex ante differences in information or complementary assets, but also because firms differ in a specific type of learning ability — the ability to integrate new information to exercise a contingent claim on an asset in a factor market. We dimensionalize these differences in terms of information processing and belief updating, argue that these differences lead to different resource allocation decisions, and suggest how these decisions may generate competitive advantage.

Bookmarks Related papers MentionsView impact

Research paper thumbnail of E Pluribus Unum: Organizational Size and the Efficacy of Learning

SSRN Electronic Journal, 2013

ABSTRACT Learning from experience is a central theme in the management literature. While in gener... more ABSTRACT Learning from experience is a central theme in the management literature. While in general experiential learning is viewed as efficacious, the literature increasingly points to the difficulties inherent in the learning process — many of which stem from a deficit of information about the merits of alternative solutions. It seems plausible that larger organizations, with their capacity to simultaneously pursue a variety of potential solutions to a given challenge, may overcome this deficit. Such a perspective suggests that the efficacy of an organization's learning process should be an increasing function of organizational size. While this logic is intuitively appealing, we find that it does not fully capture the nuances of the organizational learning process. We employ a computational model and find that larger organizations, as characterized by their scale in pursuing parallel initiatives: (a) explore less than smaller organizations, (b) are less likely to discover the very best alternative, and yet (c) on average identify better alternatives. Increasing the number of parallel initiatives guides the search process towards viable alternatives, but it does so at the cost of inhibiting search breadth. Thus, in our model, the characteristics of learning by larger organizations do not result from differences in inertia or incentives that may impede learning and innovation, but rather from the properties of the organizational learning process itself.

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Intermediate Selection on a Developmental Journey

We examine the joint processes of organizational development and population selection to highligh... more We examine the joint processes of organizational development and population selection to highlight a dynamic interaction overlooked when considering the processes in isolation. Selection does not operate on quasi-stable traits directly, but rather on contemporaneous performance. Consequently, stable search strategies may be favored by selection on bases other than long-run performance, such as intertemporal performance stability and the rate of performance improvement. Using a computational model of firm innovative efforts guided by stable search strategies under alternative selection regimes, we find that the relative efficacy of alternative search strategies is reversed depending upon the inclusion or exclusion of selection.-2

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Chasing a moving target: learning in dynamic environments

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Bringing Context to the Exploration-Exploitation Trade-Off: Considering the Impact of Selection and Turbulent Environments

Ann Arbor, 2008

... tendency for precedents to become normative standards … (and) exchange relations with other o... more ... tendency for precedents to become normative standards … (and) exchange relations with other organizations” (Hannan and Freeman, 1984: 149). ... used widely in empirical work on reinforcement learning (cf., Camerer and Ho, 1999; Weber, Shafir, and ...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of The Aggregation–Learning Trade-off

Organization Science

Organizational decision making that leverages the collective wisdom and knowledge of multiple ind... more Organizational decision making that leverages the collective wisdom and knowledge of multiple individuals is ubiquitous in management practice, occurring in settings such as top management teams, corporate boards, and the teams and groups that pervade modern organizations. Decision-making structures employed by organizations shape the effectiveness of knowledge aggregation. We argue that decision-making structures play a second crucial role in that they shape the learning of individuals that participate in organizational decision making. In organizational decision making, individuals do not engage in learning by doing but, rather, in what we call learning by participating, which is distinct in that individuals learn by receiving feedback not on their own choices but, rather, on the choice made by the organization. We examine how learning by participating influences the efficacy of aggregation and learning across alternative decision-making structures and group sizes. Our central ins...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of A Behavioral Theory of Real Options

SSRN Electronic Journal, 2014

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Chasing a Moving Target: Exploitation and Exploration in Dynamic Environments

Management Science, 2012

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Myopia of Selection: Does Organizational Adaptation Limit the Efficacy of Population Selection?

Administrative Science Quarterly, 2007

This paper develops and tests a model of the effectiveness of selection processes in eliminating ... more This paper develops and tests a model of the effectiveness of selection processes in eliminating less fit organizations from a population when organizations are undergoing adaptive change. Stable organizational traits, such as a search strategy or routine, do not imply that an organization's performance will remain stable over time or that cross-sectional differences in performance will persist. These properties create the possibility that population-level selection processes will be inefficient in that organizations with potentially superior long-run performance will be selected out. We theorize that organizational-level adaptation often results in fluctuations in current performance across time. These fluctuations may attenuate the degree to which current performance differences among organizations are indicative of future performance. As a consequence, search strategies that generate systematically different performance trajectories, even if they share a common long-run outco...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Whom Should We Imitate? Imitation Strategy and Industry Knowledge Structure

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Pre-Entry Experience, Post-Entry Organizational Learning, and New Entrants' Performance

Academy of Management Proceedings

Existing literature has shown that pre-entry experience is positively associated with new entrant... more Existing literature has shown that pre-entry experience is positively associated with new entrants’ survival rates and performance. However, whether the initial advantage of pre-entry experience er...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Winner-Take-All Dynamics Revisited : Positive Feedback When Earlier Adopters ’ Influence Decays

The literature on network effects has a longstanding controversy regarding the possibility that m... more The literature on network effects has a longstanding controversy regarding the possibility that markets may lock into an inferior technology. This controversy was triggered by Arthur’s (1989) model of positive feedback (success begets more success) in markets with competition between incompatible technologies. Critics point to the lack of compelling evidence for such lock-in. This confusion, in part, stems from a hidden assumption in the Arthur model influence of adopters never decays. We shed new light on this confusion by examining the implications of influence that decays over time. In the absence of influence decay, there is a good possibility that a market will lock-in to an inferior technology, as shown by prior work. However, when the influence of earlier adopters decays over time, the possibility of lock-in to an inferior technology is substantially attenuated. Despite the existence of positive feedback, this decay triggers a protracted period of technology competition, whic...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Under-Confidence : Second-Order Knowledge and the Efficacy of Learning

Knowledge is a central construct in the modern strategy literature because it contributes to perf... more Knowledge is a central construct in the modern strategy literature because it contributes to performance differences across firms. In the Carnegie School tradition, knowledge is the outcome of a process of search and learning by which firms discover better solutions to the challenges they face. Knowledge can be interpreted as more accurate beliefs about the merits of alternative policy choices which we term first-order knowledge. Such knowledge may be employed to allocate resources across alternative investment opportunities, for example, new plants, new drug molecules, or venture capital investments. Yet knowledge has a second dimension related to a firm's confidence in its beliefs. Intuition suggests that accuracy has limited value without confidence, and confidence has limited value without accuracy. We term accuracy-confidence matches second-order knowledge. We identify conditions under which low second-order knowledge (a confidence mismatch high confidence in inaccurate bel...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Does Size Matter? Parallel Search and the Efficacy of Experiential Learning

Experiential learning is a central idea in the management literature ? and its general efficacy i... more Experiential learning is a central idea in the management literature ? and its general efficacy is a taken-for-granted element of management thought. However, we also know that history is not generous with experience, and this experience constraint engenders errors and myopia in the process of experiential learning. We consider the implications of relaxing the experience constraint ? by increasing the number of agents in the organization to make possible parallel search. Employing a computational model, we find three stylized facts about larger, less constrained, organizations: (a) they explore less than smaller organizations, (b) they are less likely to discover the very best alternative, and (c) they

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Learning-by-Participating: The Dynamics of Information Aggregation in Organizations

Social Science Research Network, 2019

Decision-making that leverages the collective knowledge of multiple individuals is ubiquitous in ... more Decision-making that leverages the collective knowledge of multiple individuals is ubiquitous in organizations, occurring in settings such as groups, committees, top management teams, and boards. Research has examined how decision-making structures (e.g., plurality voting) aggregate individuals’ beliefs into a single organizational choice. We argue that decision-making structures play another role beyond just aggregating individuals' beliefs — they also shape the learning of the individuals who participate in decision making. Learning-by-participating is distinct from learning-by-doing (i.e., experiential learning) in that individuals receive feedback not on their own choices, but rather on the choice made by the organization. We develop a theoretically grounded conceptual framework to characterize different decision-making structures, together with a computational model of organizational decision-making, to examine the impact of learning-by-participating across different such structures. We find that decision-making structures vary across two critical outcomes — their efficacy in aggregating information and their efficacy in shaping individual learning, and that these outcomes may be inversely related. Adjudicating among these two outcomes is the way in which organizations utilize the knowledge of organizational contrarians, individuals who favor choices that differ from that of the organization. A key implication is that the choice of a decision-making structure requires taking the learning context into account. Structures that are effective in settings where the potential for learning is limited may be less effective when individual learning is important. We discuss further implications for research on organizational decision making, learning, top management teams, and the wisdom of organizational crowds.

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Aspirations, Beliefs and a New Idea: Building on March’s Other Model of Performance Feedback

SSRN Electronic Journal

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Resource Allocation, Real Options, and Competitive Advantage: A Behavioral Approach

Academy of Management Proceedings

This paper develops a realistic real option theory of resource allocation decisions in strategic ... more This paper develops a realistic real option theory of resource allocation decisions in strategic factor markets. We build on extant financial and managerial theories, real option theories of decisi...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Reconceptualizing Imitation: Implications for Dynamic Capabilities, Innovation, and Competitive Advantage

Academy of Management Annals

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Uncertain Learning Curves: Implications for First-Mover Advantage and Knowledge Spillovers

Academy of Management Review, 2021

The existence of a learning curve in which a firm’s costs decline with cumulative experience sugg... more The existence of a learning curve in which a firm’s costs decline with cumulative experience suggests that early entry provides learning opportunities that create advantage by reducing future costs...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Artificial Intelligence and the Next Frontier of Organizational Modeling

Academy of Management Proceedings, 2019

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Resource Allocation in Strategic Factor Markets: A Realistic Real Options Approach to Generating Competitive Advantage

SSRN Electronic Journal, 2016

This paper develops a realistic real option theory of resource allocation decisions in strategic ... more This paper develops a realistic real option theory of resource allocation decisions in strategic factor markets. Competitive advantage in factor markets is underpinned by market failures that allow firms to acquire assets at less than their value in use. We recognize that market failure may result from uncertainty regarding the current and/or future value of an asset, which map, respectively, to uncertainty as modeled in the feedback learning and real options literatures. The realistic real option framework we develop grafts insights from the strategic factor market, feedback learning, and real option valuation literatures. We argue that competitive advantage may emerge not only from luck, or ex ante differences in information or complementary assets, but also because firms differ in a specific type of learning ability — the ability to integrate new information to exercise a contingent claim on an asset in a factor market. We dimensionalize these differences in terms of information processing and belief updating, argue that these differences lead to different resource allocation decisions, and suggest how these decisions may generate competitive advantage.

Bookmarks Related papers MentionsView impact

Research paper thumbnail of E Pluribus Unum: Organizational Size and the Efficacy of Learning

SSRN Electronic Journal, 2013

ABSTRACT Learning from experience is a central theme in the management literature. While in gener... more ABSTRACT Learning from experience is a central theme in the management literature. While in general experiential learning is viewed as efficacious, the literature increasingly points to the difficulties inherent in the learning process — many of which stem from a deficit of information about the merits of alternative solutions. It seems plausible that larger organizations, with their capacity to simultaneously pursue a variety of potential solutions to a given challenge, may overcome this deficit. Such a perspective suggests that the efficacy of an organization's learning process should be an increasing function of organizational size. While this logic is intuitively appealing, we find that it does not fully capture the nuances of the organizational learning process. We employ a computational model and find that larger organizations, as characterized by their scale in pursuing parallel initiatives: (a) explore less than smaller organizations, (b) are less likely to discover the very best alternative, and yet (c) on average identify better alternatives. Increasing the number of parallel initiatives guides the search process towards viable alternatives, but it does so at the cost of inhibiting search breadth. Thus, in our model, the characteristics of learning by larger organizations do not result from differences in inertia or incentives that may impede learning and innovation, but rather from the properties of the organizational learning process itself.

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Intermediate Selection on a Developmental Journey

We examine the joint processes of organizational development and population selection to highligh... more We examine the joint processes of organizational development and population selection to highlight a dynamic interaction overlooked when considering the processes in isolation. Selection does not operate on quasi-stable traits directly, but rather on contemporaneous performance. Consequently, stable search strategies may be favored by selection on bases other than long-run performance, such as intertemporal performance stability and the rate of performance improvement. Using a computational model of firm innovative efforts guided by stable search strategies under alternative selection regimes, we find that the relative efficacy of alternative search strategies is reversed depending upon the inclusion or exclusion of selection.-2

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Chasing a moving target: learning in dynamic environments

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Bringing Context to the Exploration-Exploitation Trade-Off: Considering the Impact of Selection and Turbulent Environments

Ann Arbor, 2008

... tendency for precedents to become normative standards … (and) exchange relations with other o... more ... tendency for precedents to become normative standards … (and) exchange relations with other organizations” (Hannan and Freeman, 1984: 149). ... used widely in empirical work on reinforcement learning (cf., Camerer and Ho, 1999; Weber, Shafir, and ...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of The Aggregation–Learning Trade-off

Organization Science

Organizational decision making that leverages the collective wisdom and knowledge of multiple ind... more Organizational decision making that leverages the collective wisdom and knowledge of multiple individuals is ubiquitous in management practice, occurring in settings such as top management teams, corporate boards, and the teams and groups that pervade modern organizations. Decision-making structures employed by organizations shape the effectiveness of knowledge aggregation. We argue that decision-making structures play a second crucial role in that they shape the learning of individuals that participate in organizational decision making. In organizational decision making, individuals do not engage in learning by doing but, rather, in what we call learning by participating, which is distinct in that individuals learn by receiving feedback not on their own choices but, rather, on the choice made by the organization. We examine how learning by participating influences the efficacy of aggregation and learning across alternative decision-making structures and group sizes. Our central ins...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of A Behavioral Theory of Real Options

SSRN Electronic Journal, 2014

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Chasing a Moving Target: Exploitation and Exploration in Dynamic Environments

Management Science, 2012

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Myopia of Selection: Does Organizational Adaptation Limit the Efficacy of Population Selection?

Administrative Science Quarterly, 2007

This paper develops and tests a model of the effectiveness of selection processes in eliminating ... more This paper develops and tests a model of the effectiveness of selection processes in eliminating less fit organizations from a population when organizations are undergoing adaptive change. Stable organizational traits, such as a search strategy or routine, do not imply that an organization's performance will remain stable over time or that cross-sectional differences in performance will persist. These properties create the possibility that population-level selection processes will be inefficient in that organizations with potentially superior long-run performance will be selected out. We theorize that organizational-level adaptation often results in fluctuations in current performance across time. These fluctuations may attenuate the degree to which current performance differences among organizations are indicative of future performance. As a consequence, search strategies that generate systematically different performance trajectories, even if they share a common long-run outco...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Whom Should We Imitate? Imitation Strategy and Industry Knowledge Structure

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Pre-Entry Experience, Post-Entry Organizational Learning, and New Entrants' Performance

Academy of Management Proceedings

Existing literature has shown that pre-entry experience is positively associated with new entrant... more Existing literature has shown that pre-entry experience is positively associated with new entrants’ survival rates and performance. However, whether the initial advantage of pre-entry experience er...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Winner-Take-All Dynamics Revisited : Positive Feedback When Earlier Adopters ’ Influence Decays

The literature on network effects has a longstanding controversy regarding the possibility that m... more The literature on network effects has a longstanding controversy regarding the possibility that markets may lock into an inferior technology. This controversy was triggered by Arthur’s (1989) model of positive feedback (success begets more success) in markets with competition between incompatible technologies. Critics point to the lack of compelling evidence for such lock-in. This confusion, in part, stems from a hidden assumption in the Arthur model influence of adopters never decays. We shed new light on this confusion by examining the implications of influence that decays over time. In the absence of influence decay, there is a good possibility that a market will lock-in to an inferior technology, as shown by prior work. However, when the influence of earlier adopters decays over time, the possibility of lock-in to an inferior technology is substantially attenuated. Despite the existence of positive feedback, this decay triggers a protracted period of technology competition, whic...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Under-Confidence : Second-Order Knowledge and the Efficacy of Learning

Knowledge is a central construct in the modern strategy literature because it contributes to perf... more Knowledge is a central construct in the modern strategy literature because it contributes to performance differences across firms. In the Carnegie School tradition, knowledge is the outcome of a process of search and learning by which firms discover better solutions to the challenges they face. Knowledge can be interpreted as more accurate beliefs about the merits of alternative policy choices which we term first-order knowledge. Such knowledge may be employed to allocate resources across alternative investment opportunities, for example, new plants, new drug molecules, or venture capital investments. Yet knowledge has a second dimension related to a firm's confidence in its beliefs. Intuition suggests that accuracy has limited value without confidence, and confidence has limited value without accuracy. We term accuracy-confidence matches second-order knowledge. We identify conditions under which low second-order knowledge (a confidence mismatch high confidence in inaccurate bel...

Bookmarks Related papers MentionsView impact

Research paper thumbnail of Does Size Matter? Parallel Search and the Efficacy of Experiential Learning

Experiential learning is a central idea in the management literature ? and its general efficacy i... more Experiential learning is a central idea in the management literature ? and its general efficacy is a taken-for-granted element of management thought. However, we also know that history is not generous with experience, and this experience constraint engenders errors and myopia in the process of experiential learning. We consider the implications of relaxing the experience constraint ? by increasing the number of agents in the organization to make possible parallel search. Employing a computational model, we find three stylized facts about larger, less constrained, organizations: (a) they explore less than smaller organizations, (b) they are less likely to discover the very best alternative, and (c) they

Bookmarks Related papers MentionsView impact