Search, Failure, and the Value of Moderate Patience
35 Pages Posted: 19 Oct 2009 Last revised: 12 Jun 2014
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Search, Failure, and the Value of Moderate Patience
Search, Failure, and the Value of Moderate Patience
Date Written: March 29, 2010
Abstract
Conventional wisdom suggests that successful innovation in complex and novel environments requires patience – persistence despite failures – to ensure broad search for good solutions. Using an agent-based simulation model, I show that the link between patience and innovation is complex: Moderate levels of patience promote broad and effective search. High levels of patience, in contrast, can have unintended effects and even decrease performance despite increasing the degree of search. Furthermore, because translating the gains of patience into performance improvements requires time, low levels of patience are generally optimal for shorter time frames. My findings indicate that paying attention to how patience affects both the explorative and exploitative aspects of search can show when patience may effectively boost innovation.
Keywords: search, experimentation, innovation, complexity, agent-based simulation
JEL Classification: C63, D83, O31
Suggested Citation: Suggested Citation