A central idea in the behavioral theory of the firm is that when an organization’s performance falls below aspirations, a search is triggered. While this aspiration-based model has dominated the empirical literature, it is only one of two Carnegie School accounts of how firms use performance...

We take a microfoundational approach to understanding the origin of heterogeneity in firms’ capacity to adapt to technological change. We develop a computational model of individual-level learning in an organizational setting characterized by interdependence and ambiguity. The model leads to...