IDEAS home Printed from
   My bibliography  Save this paper

Organizational Learning: An Experimental Study


  • April Franco
  • Andreas Blume
  • John Duffy


In this paper we experimentally investigate decentralized, organizational learning. The main objective is to understand how learning members of an organization cope with the confounding effects of the simultaneous learning of others. We use versions of a simple "success-or-failure" game due to Blume and Franco [2003] as our stylized model of organizational learning. In this game, each player has two action choices and is unable to communicate or observe the action choice of their partner. Only one choice of actions by a pair results in a "success" (high payoff); all other action combinations lead to failure (zero payoff). The success or failure game is repeated for two rounds, but ends early if a success is achieved. Decentralization is captured by explicit constraints on players' strategies, for instance, players are unable to condition their action choices on the past actions of the other member of the organization. This game theoretic formalization of organizational learning together with the assumption of fully rational agents are novel features of this study. They allow for crisp predictions with regard to the frequency with which organizational members who have not achieved a success should switch their action choices as a function of parameters governing individual preferences, such as the rate of time preference, which serves as one treatment variable. As a second treatment, we compare the two-player organizational learning model with a baseline, one-player individual decision-making problem involving a choice that is analogous to the organizational learning model. Preliminary experimental evidence suggests that in the two-player organizational model, players do account for the confounding effects of the learning of others by switching actions less frequently than in the one-period, individual decision making experiment in line with the predictions of the theory. We are currently exploring, experimentally, the predictions in the case where the size of the organization is increases from 2 to 3 and the number of success outcomes remains fixed at 1

Suggested Citation

  • April Franco & Andreas Blume & John Duffy, 2004. "Organizational Learning: An Experimental Study," Econometric Society 2004 North American Summer Meetings 498, Econometric Society.
  • Handle: RePEc:ecm:nasm04:498

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.


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

    Cited by:

    1. repec:pit:wpaper:456 is not listed on IDEAS

    More about this item


    learning; organizational behavior; experimental economics;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness


    Access and download statistics


    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:ecm:nasm04:498. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.