Jerker Denrell

Jerker Denrell
The University of Warwick · Warwick Business School (WBS)

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44
Publications
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2,953
Citations

Publications

Publications (44)
Article
Full-text available
When does market success indicate superior merit? We show that when consumer choices between products with equal prices depend on quality but also on past popularity, more popular products are not necessarily of higher quality. Rather, a medium level of popularity may be associated with lower quality than lower levels of popularity. Using a formal...
Article
Full-text available
How does the popularity of a concept depend on how it contrasts with and complements existing concepts? We argue that being similar to existing concepts, being located in a popular domain, and being combined with similar existing concepts are important for gaining attention early on but less important and even negative for sustaining popularity. To...
Article
Full-text available
We revisit the competency trap and reexamine when it occurs. We show that a bias against alternatives that improve with practice does not require that learning is myopic in the sense of lacking foresight or failing to explore. The same bias occurs even if learners engage in substantial exploration and have foresight. In fact, we demonstrate that ev...
Article
Full-text available
If people avoid alternatives they dislike, a negative evaluative bias emerges because errors of under‐evaluation are unlikely to be corrected. Prior work that analyzed this mechanism has shown that when the social environment exposes people to avoided alternatives (i.e., it makes them resample them), then evaluations can become systematically more...
Article
This article introduces strategists to the Mindspace framework and explores its applications in strategic contexts. This framework consists of nine effective behavioral interventions that are grounded in public policy applications, and it focuses on how changing the context can be more effective than attempts to de-bias decision makers. Behavioral...
Article
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We demonstrate a paradox of selection: the average level of skill among the survivors of selection may initially increase but eventually decrease. This result occurs in a simple model in which performance is not frequency dependent, there are no delayed effects, and skill is unrelated to risk-taking. The performance of an agent in any given period...
Article
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We demonstrate that a sampling-based mechanism can offer an alternative explanation for belief synchronization in social groups and the persistence of collective illusions. Our model assumes that people are more likely to sample popular alternatives than unpopular alternatives. We show that this mechanism is sufficient to explain belief synchroniza...
Article
Existing explanations of reference-dependent risk sensitivity attribute it to cognitive imperfections and heuristic choice processes. This article shows that behavior consistent with an S-shaped value function could be an implication of rational inferences about the expected values of alternatives. Theoretically, I demonstrate that even a risk-neut...
Article
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We propose that random variation should be considered one of the most important explanatory mechanisms in the management sciences. There are good theoretical reasons to expect that chance events strongly impact organizational behavior and outcomes. We argue that models built on random variation can provide parsimonious explanations of several impor...
Article
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Most studies of fashion and fads focus on objects and practices that once were popular. We argue that limiting the sample to such trajectories generates a selection bias that obscures the underlying process and generates biased estimates. Through simulations and the analysis of a data set that has previously not been used to analyze the rise and fa...
Conference Paper
Full-text available
Societies sometimes stick to the status quo instead of switching to superior technologies and institutions. Existing explanations often attribute this to a coordination failure due to payoff externalities: people may know that another alternative is superior but nobody has an incentive to switch unless many others do so. We show that a simple learn...
Article
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The relationship between performance and ability is a central concern in the social sciences: Are the most successful much more able than others, and are failures unskilled? Prior research has shown that noise and self-reinforcing dynamics make performance unpredictable and lead to a weak association between ability and performance. Here we show th...
Article
Most theories and experimental studies of choice under uncertainty focus on choices between alternatives with known probability distributions. In many real-life contexts, however, the distribution of payoffs is not known, but have to be estimated from observations of outcomes. March (1996) illustrated how such experiential learning could produce se...
Article
To what extent can one infer that superior capabilities are driving sustained superior performance? Modeling performance as some combination of differences in capabilities and processes of cumulative advantage, we argue that a Bayesian framework in which decision makers take into account the differences in cumulative advantage provides for a correc...
Article
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Recent research has argued that several well-known judgment biases may be due to biases in the available information sample rather than to biased information processing. Most of these sample-based explanations assume that decision makers are "naive": They are not aware of the biases in the available information sample and do not correct for them. H...
Article
Individuals tend to select again alternatives about which they have positive impressions and to avoid alternatives about which they have negative impressions. Here we show how this sequential sampling feature of the information acquisition process leads to the emergence of an illusory correlation between estimates of the attributes of multi-attribu...
Article
Successfully predicting that something will become a big hit seems impressive. Managers and entrepreneurs who have made successful predictions and have invested money on this basis are promoted, become rich, and may end up on the cover of business magazines. In this paper, we show that an accurate prediction about such an extreme event, e.g., a big...
Article
Full-text available
Performance sampling models of duration dependence in employee turnover and firm exit predict that hazard rates will initially be low, gradually rise to a maximum, and then fall. Some empirical duration distributions have bimodal hazard rates, however. In this paper, we present a generalization of the performance sampling model that can account for...
Article
Full-text available
To what extent are our decision-making and learning processes influenced indirectly by others?
Article
The observed association between performance and organizational risk taking has usually been attributed to the influence of performance on risk preferences. Here I show how a simple model of adaptation, which only assumes that organizations avoid activities with poor past performance, can explain the empirically observed U-shaped association betwee...
Article
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Most studies in organization theory are retrospective and rely on historical data. Because more data are available about widely diffused practices or about large populations, studies typically focus on these. Using simulation, we demonstrate that such selective sampling of empirical settings has important implications for two major research program...
Article
Most studies in organization theory are retrospective and rely on historical data. Because more data are available about widely diffused practices or about large populations, studies typically focus on these. Using simulation, we demonstrate that such selective sampling of empirical settings has important implications for two major research program...
Article
Full-text available
Most explanations of social influence focus on why individuals might want to agree with the opinions or attitudes of others. The authors propose a different explanation that assumes the attitudes of others influence only the activities and objects individuals are exposed to. For example, individuals are likely to be exposed to activities that their...
Article
One of the most enduring puzzles in the strategy literature is the negative association between risk and return known as the Bowman paradox. This paper formalizes a model of strategic conduct based on the concept of strategic fit and the heterogeneity of firm strategic capabilities. This model is shown mathematically to yield the negative associati...
Article
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Humans and animals learn from experience by reducing the probability of sampling alternatives with poor past outcomes. Using simulations, J. G. March (1996) illustrated how such adaptive sampling could lead to risk-averse as well as risk-seeking behavior. In this article, the author develops a formal theory of how adaptive sampling influences risk...
Article
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Animals and humans often have to choose between options with reward distributions that are initially unknown and can only be learned through experience. Recent experimental and theoretical work has demonstrated that such decision processes can be modeled using computational models of reinforcement learning (Daw et al, 2006; Erev & Barron, 2005; Sut...
Article
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Individuals are typically more likely to continue to interact with people if they have a positive impression of them. This article shows how this sequential sampling feature of impression formation can explain several biases in impression formation. The underlying mechanism is the sample bias generated when the probability of interaction depends on...
Article
Popular discourse as well as several recent academic theories view high performance as a signal of capability. Although it is reasonable to believe that more capable firms will achieve higher performance, several other factors influence firm performance, including luck. As a result, high performance is, at best, a very noisy signal of capabilities....
Article
To find the secrets of business success, what could be more natural than studying successful businesses? In fact, nothing could be more dangerous, warns this Stanford professor. Generalizing from the examples of successful companies is like generalizing about New England weather from data taken only in the summer. That's essentially what businesspe...
Article
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If knowledge is to be managed and transferred, it is essential that members of organizations know and agree on where capabilities reside. Few studies, however, have examined the difficulties of evaluating capabilities in large firms. This paper reports an in-depth empirical study of capabilities central to knowledge management efforts in large lead...
Article
Full-text available
Many organizational actions need not have any immediate or direct payoff consequence but set the stage for subsequent actions that bring the organization toward some actual payoff. Learning in such settings poses the challenge of credit assignment (Minsky 1961), that is, how to assign credit for the overall outcome of a sequence of actions to each...
Article
Full-text available
Strategy is concerned with sustained interfirm profitability differences. Observations of such sustained differences are often attributed to unobserved systematic a priori differences in firm characteristics. This paper shows that sustained interfirm profitability differences may be very likely even if there are no a priori differences among firms....
Article
As emphasized by Barney (1986), any explanation of superior profitability must account for why the resources supporting such profitability could have been acquired for a price below their rent generating capacity. Building upon the literature in economics on coordination failures and incomplete markets, we suggest a framework for analyzing such str...
Article
Organizations learn from other organizations. However, the observations available to them are typically a biased sample. The organizations that can be observed at any point in time are the survivors of a selective process that has eliminated a large fraction of the underlying population. In addition, there is a strong tendency to focus on successfu...
Article
Individuals and social systems are often portrayed as risk averse and resistant to change. Such propensities are characteristically attributed to individual, organizational, and cultural traits such as risk aversion, uncertainty-avoidance, discounting, and an unwillingness to change. This paper explores an alternative interpretation of such phenome...
Article
A typical argument in Marxist and radical writings on economic organization is that prevailing practices, rather than being the most efficient, have been adopted in order to increase the share of the surplus of capitalists. Using an incomplete contract approach, this article develops a model which demonstrates how and when adopting an inferior econ...
Article
Individuals are typically more likely to repeatedly select alter- natives they have a positive impression of. This paper shows that this sequential sampling feature of the information acqui- sition process might lead to the emergence of illusory corre- lation between attributes of multi-attribute alternatives. This suggests an alternative explanati...
Article
I show that common assumptions about learning leads to risk averse be- havior: in the long run the learner is most likely to choose the least variable alternative among a set of alternatives with identical expected values. If the learner can choose between normally distributed alternatives, reinforcement learning leads to behavior identical to that...
Article
The relation between performance and ability is a central concern in discussions of imitation and learning -should we imitate and learn from the highest performers? Past research has shown how rich-get-richer dynam-ics, combined with noise, can produce a weak or even non-existent association between performance and ability. Still, if performance an...
Article
Working Paper -Please do not quote or distribute without permission People sometimes agree with the beliefs of the majority even when the majority is wrong. Most prior explanations have proposed that people engage in some form of social learning po-tentially complemented by motivated cognition: when becoming aware of the actions or beliefs of other...

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