IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v68y2022i1p300-315.html
   My bibliography  Save this article

Good to Go First? Position Effects in Expert Evaluation of Early-Stage Ventures

Author

Listed:
  • Jiang Bian

    (University of Hong Kong, Pokfulam, Hong Kong)

  • Jason Greenberg

    (University of Pennsylvania, Philadelphia, Pennsylvania 19104)

  • Jizhen Li

    (Tsinghua University, Beijing 100084, China)

  • Yanbo Wang

    (University of Hong Kong, Pokfulam, Hong Kong)

Abstract

There is often considerable anxiety and conflicting advice concerning the benefits of presenting/being evaluated first. We thus investigate how expert evaluators vary in their evaluations of entrepreneurial proposals based upon the order in which they are evaluated. Our research setting is a premiere innovation fund competition in Beijing, China, where the prize money at stake is economically meaningful, and evaluators are quasi-randomly assigned to evaluate written grant proposals without the possibility of peer influence. This enables us to credibly recover a causal position effect. We also theorize and test how heterogeneity in evaluators’ prior (context-specific) judging experience moderates position effects. Overall, we find that a proposal evaluated first requires total assets in the top 10th percentile to merely equal the evaluation of a proposal in the bottom 10th percentile that is not evaluated first. Firm and evaluator fixed-effects models yield consistent findings. We consider evaluation design elements that may mollify these position effects in the discussion section.

Suggested Citation

  • Jiang Bian & Jason Greenberg & Jizhen Li & Yanbo Wang, 2022. "Good to Go First? Position Effects in Expert Evaluation of Early-Stage Ventures," Management Science, INFORMS, vol. 68(1), pages 300-315, January.
    • Handle: RePEc:inm:ormnsc:v:68:y:2022:i:1:p:300-315
    DOI: 10.1287/mnsc.2021.4132
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.2021.4132
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.2021.4132?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jonathan T. Eckhardt & Scott Shane & Frédéric Delmar, 2006. "Multistage Selection and the Financing of New Ventures," Management Science, INFORMS, vol. 52(2), pages 220-232, February.
    2. Page, Lionel & Page, Katie, 2010. "Last shall be first: A field study of biases in sequential performance evaluation on the Idol series," Journal of Economic Behavior & Organization, Elsevier, vol. 73(2), pages 186-198, February.
    3. Sahlman, William A., 1990. "The structure and governance of venture-capital organizations," Journal of Financial Economics, Elsevier, vol. 27(2), pages 473-521, October.
    4. Ethan Mollick & Ramana Nanda, 2016. "Wisdom or Madness? Comparing Crowds with Expert Evaluation in Funding the Arts," Management Science, INFORMS, vol. 62(6), pages 1533-1553, June.
    5. Clingingsmith, David & Shane, Scott, 2017. "Let Others Go First: How Pitch Order Affects Investor Interest in Elevator Pitches," SocArXiv 6rbyx, Center for Open Science.
    6. Daniel Feenberg & Ina Ganguli & Patrick Gaulé & Jonathan Gruber, 2017. "It’s Good to Be First: Order Bias in Reading and Citing NBER Working Papers," The Review of Economics and Statistics, MIT Press, vol. 99(1), pages 32-39, March.
    7. Kevin J. Boudreau & Eva C. Guinan & Karim R. Lakhani & Christoph Riedl, 2016. "Looking Across and Looking Beyond the Knowledge Frontier: Intellectual Distance, Novelty, and Resource Allocation in Science," Management Science, INFORMS, vol. 62(10), pages 2765-2783, October.
    8. Jonathan Levav & Mark Heitmann & Andreas Herrmann & Sheena S. Iyengar, 2010. "Order in Product Customization Decisions: Evidence from Field Experiments," Journal of Political Economy, University of Chicago Press, vol. 118(2), pages 274-299, April.
    9. Wang, Yanbo & Li, Jizhen & Furman, Jeffrey L., 2017. "Firm performance and state innovation funding: Evidence from China’s innofund program," Research Policy, Elsevier, vol. 46(6), pages 1142-1161.
    10. Aleksandra Kacperczyk & Matt Marx, 2016. "Revisiting the Small-Firm Effect on Entrepreneurship: Evidence from Firm Dissolutions," Organization Science, INFORMS, vol. 27(4), pages 893-910, August.
    11. Prithwiraj Choudhury, 2017. "Innovation Outcomes in a Distributed Organization: Intrafirm Mobility and Access to Resources," Organization Science, INFORMS, vol. 28(2), pages 339-354, April.
    12. Kevin J. Boudreau & Nicola Lacetera & Karim R. Lakhani, 2011. "Incentives and Problem Uncertainty in Innovation Contests: An Empirical Analysis," Management Science, INFORMS, vol. 57(5), pages 843-863, May.
    13. Lauren Lanahan & Daniel Armanios, 2018. "Does More Certification Always Benefit a Venture?," Organization Science, INFORMS, vol. 29(5), pages 931-947, October.
    14. Hong Luo, 2014. "When to Sell Your Idea: Theory and Evidence from the Movie Industry," Management Science, INFORMS, vol. 60(12), pages 3067-3086, December.
    15. Herbert Glejser & Bruno Heyndels, 2001. "Efficiency and Inefficiency in the Ranking in Competitions: the Case of the Queen Elisabeth Music Contest," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 25(2), pages 109-129, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hunt, Richard A. & Townsend, David M. & Manocha, Parul & Simpson, Joseph J., 2023. "Knowledge problem diagnosis and the fate of corporate entrepreneurship initiatives," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    2. Jason Greenberg & Daniel B. Sands & Gino Cattani & Joseph Porac, 2024. "Rating systems and increased heterogeneity in firm performance: Evidence from the New York City Restaurant Industry, 1994–2013," Strategic Management Journal, Wiley Blackwell, vol. 45(1), pages 36-65, January.
    3. Arai, Real & Okazawa, Ryosuke, 2025. "Is it advantageous to be first? Evidence from a TV comedy program," Journal of Economic Behavior & Organization, Elsevier, vol. 234(C).
    4. Jorg Franke & Alexandros Papadopoulos, 2024. "Strategic Reciprocity in a Contest with Large Stakes," Department of Economics Working Papers 104/24, University of Bath, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Erin L. Scott & Pian Shu & Roman M. Lubynsky, 2020. "Entrepreneurial Uncertainty and Expert Evaluation: An Empirical Analysis," Management Science, INFORMS, vol. 66(3), pages 1278-1299, March.
    2. Arai, Real & Okazawa, Ryosuke, 2025. "Is it advantageous to be first? Evidence from a TV comedy program," Journal of Economic Behavior & Organization, Elsevier, vol. 234(C).
    3. Roma, Paolo & Messeni Petruzzelli, Antonio & Perrone, Giovanni, 2017. "From the crowd to the market: The role of reward-based crowdfunding performance in attracting professional investors," Research Policy, Elsevier, vol. 46(9), pages 1606-1628.
    4. Hong Luo & Jeffrey Macher & Michael Wahlen, 2021. "Judgment Aggregation in Creative Production: Evidence from the Movie Industry," Management Science, INFORMS, vol. 67(10), pages 6358-6377, October.
    5. Erin L. Scott & Pian Shu & Roman M. Lubynsky, 2015. "Are “Better” Ideas More Likely to Succeed? An Empirical Analysis of Startup Evaluation," Harvard Business School Working Papers 16-013, Harvard Business School.
    6. Munari, Federico & Toschi, Laura, 2021. "The impact of public funding on science valorisation: an analysis of the ERC Proof-of-Concept Programme," Research Policy, Elsevier, vol. 50(6).
    7. Sanne J. Joustra & Ruud H. Koning & Alex Krumer, 2021. "Order Effects in Elite Gymnastics," De Economist, Springer, vol. 169(1), pages 21-35, February.
    8. Denis Frydrych & Tony Kinder, 2015. "How New Is Crowdfunding? The Venture Capital Evolution without Revolution – Discourse on Risk Capital Themes and their Relevance to Poland (Jak nowe jest zjawisko finansowana spolecznosciowego? Ewoluc," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 13(56), pages 177-194.
    9. Méon, Pierre-Guillaume & Szafarz, Ariane, 2011. "The modern corporation as a safe haven for taste-based discrimination: An agency model of hiring decisions," Labour Economics, Elsevier, vol. 18(4), pages 487-497, August.
    10. Stefan D. Haigner & Stefan Jenewein & Hans-Christian Müller & Florian Wakolbinger, 2010. "The first shall be last: Serial position effects in the case contestants evaluate each other," Economics Bulletin, AccessEcon, vol. 30(4), pages 3170-3176.
    11. Kurt W. Rotthoff, 2015. "(Not Finding a) Sequential Order Bias in Elite Level Gymnastics," Southern Economic Journal, John Wiley & Sons, vol. 81(3), pages 724-741, January.
    12. Darren Grant, 2023. "Uncovering bias in order assignment," Economic Inquiry, Western Economic Association International, vol. 61(1), pages 82-98, January.
    13. Beomsoo Kim & Sangsoo Park & Yang Zhao, 2021. "How people vote in contests: new findings from Immortal Songs 2," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(1), pages 45-62, March.
    14. Harris, Mark N. & Novarese, Marco & Wilson, Chris M., 2022. "Being in the right place: A natural field experiment on the causes of position effects in individual choice," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 24-40.
    15. Marc T. Junkunc & Jonathan T. Eckhardt, 2009. "Technical Specialized Knowledge and Secondary Shares in Initial Public Offerings," Management Science, INFORMS, vol. 55(10), pages 1670-1687, October.
    16. A. Heughebaert & T. Vanacker & S. Manigart, 2012. "Institutional Frameworks, Venture Capital and the Financing of European New Technology-Based Firms," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/809, Ghent University, Faculty of Economics and Business Administration.
    17. Hillary N. Morgan & Kurt W. Rotthoff, 2014. "The Harder The Task, The Higher The Score: Findings Of A Difficulty Bias," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 1014-1026, July.
    18. Kurt W. Rotthoff, 2015. "(Not Finding a) Sequential Order Bias in Elite Level Gymnastics," Southern Economic Journal, Southern Economic Association, vol. 81(3), pages 724-741, January.
    19. Fabio Bertoni & Massimo Colombo & Luca Grilli, 2013. "Venture capital investor type and the growth mode of new technology-based firms," Small Business Economics, Springer, vol. 40(3), pages 527-552, April.
    20. Paolo Roma & Esther Gal-Or & Rachel R. Chen, 2018. "Reward-Based Crowdfunding Campaigns: Informational Value and Access to Venture Capital," Information Systems Research, INFORMS, vol. 29(3), pages 679-697, September.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:68:y:2022:i:1:p:300-315. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.