Learning from strategic success and failure

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Abstract

Organizations facing complex, ambiguous, and dynamic environments find adaptive learning a key to survival and success. This study proposes three models of organization response in such environments: 1) A model of how aspiration levels or goals adapt over time, 2) a model of the riskiness of strategic choices made, and 3) a model of the innovativeness of search activities (R & D). In each model, the difference between performance and aspiration level is posited to be an important explanatory variable. Using the Markstrat game as a research environment, the data are consistent with all three models.

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