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Decentralized Organizational Learning: An Experimental Investigation

  • Andreas Blume
  • John Duffy
  • April M. Franco

We experimentally study decentralized organizational learning. Our objective is to understand how learning members of an organization cope with the confounding effects of the simultaneous learning of others. We test the predictions of a stylized, rational agent model of organizational learning that provides sharp predictions as to how learning members of an organization might cope with the simultaneous learning of others as a function of fundamental variables, e.g., firm size and the discount factor. While the problem of learning while others are learning is quite difficult, we find support for the comparative static predictions of the model's unique symmetric equilibrium. (JEL C72, D23, D83)

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 99 (2009)
Issue (Month): 4 (September)
Pages: 1178-1205

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Handle: RePEc:aea:aecrev:v:99:y:2009:i:4:p:1178-1205
Note: DOI: 10.1257/aer.99.4.1178
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  1. Broseta, Bruno & Costa-Gomes, Miguel & Crawford, Vincent P., 2000. "Cognition and Behavior in Normal-Form Games: An Experimental Study," University of California at San Diego, Economics Working Paper Series qt0fp8278k, Department of Economics, UC San Diego.
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  3. Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 2010. "A theory of Fads, Fashion, Custom and cultural change as informational Cascades," Levine's Working Paper Archive 1193, David K. Levine.
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  11. Andreas Blume, 1998. "Coordination and Learning with a Partial Language," CIG Working Papers FS IV 98-11, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  12. Blume, Andreas & Gneezy, Uri, 2010. "Cognitive forward induction and coordination without common knowledge: An experimental study," Games and Economic Behavior, Elsevier, vol. 68(2), pages 488-511, March.
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  20. Blume, Andreas & Franco, April Mitchell, 2007. "Decentralized learning from failure," Journal of Economic Theory, Elsevier, vol. 133(1), pages 504-523, March.
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  23. Patrick Bolton & Christopher Harris, 1999. "Strategic Experimentation," Econometrica, Econometric Society, vol. 67(2), pages 349-374, March.
  24. Roberto A. Weber & Colin F. Camerer, 2003. "Cultural Conflict and Merger Failure: An Experimental Approach," Management Science, INFORMS, vol. 49(4), pages 400-415, April.
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