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PreprintCited by 54Decision-Making and Behavioral EconomicsExperimental Behavioral Economics StudiesComplex Systems and Decision Making

Search on Rugged Landscapes: An Experimental Study

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Billinger, Stephan, Stieglitz, Nils, Schumacher, Terry R.·2010·SSRN Electronic Journal
DOI 10.2139/ssrn.1711743
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Abstract

This paper presents findings from a laboratory experiment on human decision-making in a complex combinatorial task. We draw on the canonical NK model to depict tasks with varying complexity and find strong evidence for a behavioral model of adaptive search. Success narrows down search to the neighborhood of the status quo, while failure promotes gradually more explorative search. Task complexity does not have a direct effect on behavior, but systematically affects the feedback conditions that guide success-induced exploitation and failure-induced exploration. The analysis also shows that human participants were prone to over-exploration, since they broke off the search for local improvements too early. We derive stylized decision rules that generate the search behavior observed in the experiment and discuss the implications of our findings for individual decision-making and organizational search.

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Crossref · 10.2139/ssrn.1711743

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66 of 66 references verified0 citation errors · 0 not checkable

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  • The NK model is suitable for depicting interdependent variables in managerial problems.

    “The solution space is adapted from the NK model [24] which is deemed suitable because it depicts the interdependent variables in managerial problems [5, 9, 15, 17].”

    From Closed-mindedness and insulation in groupthink: their effects and the devil’s advocacy as a preventive measure (2021) · cites this paper as [5]

  • The proposed model is based on the abstraction of group decision making as a search over the NK landscape, which is suitable because it captures the interdependent variables nature of managerial decision problems and is relevant to decision making in realistic situations.

    “The proposed model is based on the abstraction of group decision making as a search over the NK landscape which is suitable because it captures the interdependent variables nature of managerial decision problems [5, 9, 15, 17] and relevant to decision making in the realistic situations [5, 17].”

    From Closed-mindedness and insulation in groupthink: their effects and the devil’s advocacy as a preventive measure (2021) · cites this paper as [5]

  • The NK model has been proven to be empirically relevant and plausible in explaining and predicting decision making under realistic situations.

    “Besides, the NK model also has been proven to be empirically relevant and plausible not only in explaining but also in predicting decision making under realistic situations [5, 17].”

    From Closed-mindedness and insulation in groupthink: their effects and the devil’s advocacy as a preventive measure (2021) · cites this paper as [5]

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Authors
Billinger, S., Stieglitz, N., & Schumacher, T. R.
Affiliations
  • University of Southern Denmark (DK)
  • Rose–Hulman Institute of Technology (US)
Corresponding author
Billinger, Stephan
ORCID
Billinger, Stephan
Venue
SSRN Electronic Journal
Publisher
Elsevier BV
Published
2010
ISSN
1556-5068 (ISSN-L)
DOI
10.2139/ssrn.1711743
OpenAlex
W1480404284
Cited by
54
References
66
Citations by year
2022: 1 · 2021: 9 · 2020: 11 · 2019: 5 · 2018: 10 · 2017: 7 · 2016: 3 · 2015: 2 · 2014: 5 · 2013: 1
Type
posted content
Language
en
Open access
Locations
SSRN Electronic Journal (acceptedVersion)
Topics
  • Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
  • Social Sciences › Safety Research › Experimental Behavioral Economics Studies
  • Social Sciences › Decision Sciences › Management Science and Operations Research › Complex Systems and Decision Making
Keywords
adaptive search, NK model, combinatorial search, task complexity, exploration and exploitation, status quo, feedback effects, decision rules, organizational search, human decision-making

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