This paper develops a realistic real option theory of resource allocation decisions in strategic factor markets. Competitive advantage in factor markets is underpinned by market failures that allow firms to acquire assets at less than their value in use. We recognize that market failure may...

We develop a behavioral theory of real options that relaxes the informational and behavioral assumptions underlying applications of financial options theory to real assets. To do so, we augment real option theory's focus on uncertain future asset values (prospective uncertainty) with feedback...

Entrants are often viewed as suffering from a “liability of newness” – at founding they rarely possess the knowledge and capabilities necessary to compete and survive. They can overcome such liabilities by learning vicariously from the knowledge of incumbent firms. But how do entrants...

Empirical evidence suggests that entrepreneurs make mistakes: too many enter markets and, once there, persist too long. While scholars have largely settled on behavioral bias as the cause, we suggest that this consensus is premature. These mistakes may also arise from a process in which...

Entrants are often viewed as suffering from a “liability of newness” — at founding they rarely possess the knowledge and capabilities necessary to compete and survive. They can overcome this liability by learning vicariously from the knowledge of incumbent firms. But how can entrants learn...

Recent advances in entrepreneurial practice associated with the Lean Startup has brought a sea-change in conventional wisdom to the practice of entrepreneurship – rather than commit and persevere, the advice is now to pivot your way to success. Yet this normative prescription is not as yet...

How should decision-making be organized in entrepreneurial teams when founders exhibit confidence biases? New ventures are commonly founded by teams of entrepreneurs, who must employ a decision-making structure that implicitly or explicitly defines how individual beliefs are aggregated into team...

While research has focused primarily on stars as individual contributors, we examine organizational situations where stars must work closely with non-stars. We argue that, in such situations, building teamwork around a star is an exercise in learning under complexity. In response, organizations...

Recommended readings (Machine generated): Abernathy, W.J. and Utterback, J.M. (1978), 'Patterns of innovation in technology', Technology Review, 80 (7), 40-47. -- Chesbrough, H. (2003), Open Innovation: The New Imperative for Creating and Profiting from Technology, Boston, MA: Harvard Business...