Imperfect Local Search Strategies on Technology Landscapes: Satisficing, Deliberate Experimentation and Memory Dependence
This paper contributes to the recent stream of literature on NK Model’s applications to the field of technological evolution. It is argued that while the model has a great explanatory potential in economics proper, its behavioral foundations are still maladapted for treatment of purportive decision-making strategies for technological innovation. Concentrating on the decision rule for accepting novelties, we first analyze the consequences of intentional and unintentional imprecision in following hill-climbing strategy, highlighting the interplay between rigidity and deliberate experimentation. Building on Simon’s insights on satisficing behavior and designing without final goals we build a simulative model that provides a possibility to compare strategies differing in the desired level of imprecision. Secondly, we shift our attention to the question of organizational memory, analyzing in a simulation setting a fully memory dependent and a fully memory independent innovation-related strategies. The results confirm that from the one hand up to a certain level “imperfection” of rule-following behavior is a virtue rather than a threat, while from the other, that past successes can preclude adaptability of the firm, while disregarding such successes can be very risky.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James G. March, 1991. "Exploration and Exploitation in Organizational Learning," Organization Science, INFORMS, vol. 2(1), pages 71-87, February.
- Koen Frenken & Luigi Marengo & Marco Valente, 1999. "Interdependencies, nearly-decomposability and adaption," CEEL Working Papers 9903, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
- M. L. Weitzman & K. Roberts, 1979.
"Funding Criteria for Research, Development and Exploration Projects,"
234, Massachusetts Institute of Technology (MIT), Department of Economics.
- Roberts, Kevin & Weitzman, Martin L, 1981. "Funding Criteria for Research, Development, and Exploration Projects," Econometrica, Econometric Society, vol. 49(5), pages 1261-88, September.
- Jason Potts, 2000. "The New Evolutionary Microeconomics," Books, Edward Elgar Publishing, number 2258.
- Teece, David J., 1986.
"Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy,"
Elsevier, vol. 15(6), pages 285-305, December.
- Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
- Daniel A. Levinthal, 1997. "Adaptation on Rugged Landscapes," Management Science, INFORMS, vol. 43(7), pages 934-950, July.
- Jan W. Rivkin & Nicolaj Siggelkow, 2003. "Balancing Search and Stability: Interdependencies Among Elements of Organizational Design," Management Science, INFORMS, vol. 49(3), pages 290-311, March.
- Vishwanath, Tara, 1992. "Parallel Search for the Best Alternative," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(4), pages 495-507, October.
- Levinthal, Daniel & March, James G., 1981. "A model of adaptive organizational search," Journal of Economic Behavior & Organization, Elsevier, vol. 2(4), pages 307-333, December.
- Stuart Kauffman & William G. Macready & Emily Dickinson, 1994. "Divide to Coordinate: Coevolutionary Problem Solving," Working Papers 94-06-031, Santa Fe Institute.
- Herbert A. Simon, 1996. "The Sciences of the Artificial, 3rd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691914, March.
- Jose Lobo & William G. Macready, 1999. "Landscapes: A Natural Extension of Search Theory," Working Papers 99-05-037, Santa Fe Institute.
- Weitzman, Martin L, 1979.
"Optimal Search for the Best Alternative,"
Econometric Society, vol. 47(3), pages 641-54, May.
- Kauffman, Stuart & Lobo, Jose & Macready, William G., 2000. "Optimal search on a technology landscape," Journal of Economic Behavior & Organization, Elsevier, vol. 43(2), pages 141-166, October.
- Bennett Levitan & Stuart Kauffman, 1995. "Adaptive Walks with Noisy Fitness Measurements," Working Papers 95-04-039, Santa Fe Institute.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpco:0405009. 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: (EconWPA)
If references are entirely missing, you can add them using this form.