A BEHAVIORAL APPROACH TO NEW PRODUCT INTRODUCTIONS: EVIDENCE FROM THE U.S. MOVIE INDUSTRY

Abstract

Organizations increasingly engage in launching new products, but they show heterogeneous decision-making patterns in new product strategies. This dissertation attempts to study the source of organizational heterogeneity in new product introductions (NPIs) by applying behavioral perspectives. To this end, this dissertation examines how organizations respond to the conditions of themselves and others through various decisions on new product introductions. I propose that organizations learn directly from their own experience that is relative to their own historical experience and their peers’ experience (i.e., performance feedback) and respond to it by jointly combining different aspects of NPIs such as NPI exploration and speed. Highlighting the perspectives of external actors, I also postulate that when organizations learn vicariously from their peers’ experience is contingent on the characteristics of peers and industry that are sending different signals to observing entities, such as external actors. Through three essays, I examine these ideas in the U.S. movie industry where movie studios rely on performance feedback and the conditions of others to make subsequent movie decisions.At the heart of this dissertation is the notion that organizations learn from their experience or experience of others by collecting performance information, interpreting it, and changing their NPI activities. This dissertation responds to an important call of Gavetti, Greve, Levinthala, & Ocasio (2012) for research in the cognitive aspects in decision making and the dynamics of interacting behavioral entities—organizations and institutional environments (e.g., peer organizations and investors)—filling important gaps in the literature and hence advancing our understanding of why, when, and which NPI decisions are adopted.