A paper by Sangyun Kim and Prof. Hart E. Posen (University of Wisconsin-Madison) has been chosen Best Paper for the Behavioral Strategy Interest Group at this year’s Strategic Management Society conference.
This study ("vicarious experimentation through imitation: evidence from video game sequel releases") examines an underappreciated question in research on imitation: how can innovators learn from being imitated? They call the process through which such learning occurs vicarious experimentation. Most prior work suggests that imitation is detrimental to the innovator’s advantage. By examining the implications of imitation as a source of experiential learning, the authors explore how being imitated may increase, rather than decrease, the innovator's performance. Results from the US video console game industry are consistent with the prediction that the innovator’s next-generation product has higher quality if the original product experienced more imitation. Furthermore, this effect is strengthened when the imitators are more visible in the market and the innovator successfully retains the product-specific knowledge embedded in its development unit.