The world as a casino: Bandit models in strategy and organization science research


Biemann, Torsten ; Brauer, Matthias



DOI: https://doi.org/10.5465/ambpp.2017.17051abstract
URL: https://journals.aom.org/doi/10.5465/ambpp.2017.17...
Additional URL: https://www.researchgate.net/publication/320791881...
Document Type: Conference or workshop publication
Year of publication: 2017
The title of a journal, publication series: Annual Meeting Proceedings / Academy of Management
Volume: 2017
Page range: 17051
Conference title: Academy of Management 2017 Annual Meeting
Location of the conference venue: Atlanta, GA
Date of the conference: 04.-08.08.2017
Place of publication: Chicago, IL
Publishing house: Academy of Management
ISSN: 0065-0668 , 2151-6561 , 1543-8643
Publication language: English
Institution: Business School > ABWL, Personalmanagement u. Führung (Biemann)
Subject: 330 Economics
Abstract: Strategic management researchers use multi-armed bandit model simulations to study organizational learning in, for example, strategy implementation and investment choices. We criticize that previous studies used oversimplifications in the simulated task environment and assumed decision rules that neither reflect optimal nor actual behavior. By means of Monte Carlo simulations and conceptual considerations, we show that these issues severely limit generalizations of research findings. For example, decision rules intended to prescribe optimal behavior in previous studies are outperformed by a Bayesian bandit approach that we use in our simulations. Overall, our findings suggest that greater caution should be used when researchers derive practical implications from bandit model simulations. We use these findings to derive recommendations for future use of bandit models in strategy and organization science research.

Dieser Eintrag ist Teil der Universitätsbibliographie.




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