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Competitors or enemies: the impact of organizational learning on competitive decision making (RV of 2001/52/MKT)

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This paper examines how knowledge transfer within a firm shapes decision making in a competitive environment. The authors provide a descriptive theory to explain why managerial decisions often depart from rational profit maximizing behaviour. They examine two forms of knowledge transfer in firms: formal mechanisms such as training and informal mechanisms where managers learn from their predecessors. In an experimental setting, they find that training material that evokes negative affect towards competitors' causes managers to base their decisions not only on their own outcomes but negative outcomes for competitors. This leads to non-profit maximizing behaviour. In a second experimental study, the authors find that a second generation of subjects who receive advice from a first generation place higher importance on their competitor's payoffs than the first generation. This leads to the second generation acting more aggressively

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/inseadwp2005/2005-34.pdf

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Copyright INSEAD. All rights reserved