The Power of Imperfect Imitation

Strategic Management Journal, Forthcoming

39 Pages Posted: 16 Feb 2010 Last revised: 29 Oct 2012

See all articles by Hart E. Posen

Hart E. Posen

University of Wisconsin-Madison

Jeho Lee

KAIST College of Business

Sangyoon Yi

University of Southern Denmark - Department of Marketing & Management - Strategic Organization Design (SOD) Group

Date Written: September 28, 2011

Abstract

We examine the power and limitations of imitation. Naive intuition may hold that the efficacy of imitation would be diminished by imperfections in copying high-performing firms. Employing a computational model, we find that imperfect imitation can generate unexpectedly good outcomes for follower firms – indeed, better than the outcomes achieved if they were perfect imitators. Imitation, from time to time, enables follower firms to surpass superior firms. Our model demonstrates this dynamic process increases the average performance of all firms in the industry relative to that achieved if firms were perfect imitators. This finding suggests there is an adaptive role to mechanisms, such as bounded rationality, that make perfect imitation difficult.

Keywords: Imitation, Search, Heterogeneity, Bounded Rationality, Industry Evolution

Suggested Citation

Posen, Hart E. and Lee, Jeho and Yi, Sangyoon, The Power of Imperfect Imitation (September 28, 2011). Strategic Management Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1553350

Hart E. Posen (Contact Author)

University of Wisconsin-Madison ( email )

Madison, WI
United States

HOME PAGE: http://bus.wisc.edu/faculty/hart-posen

Jeho Lee

KAIST College of Business ( email )

85 Hoegiro Dongdaemun-Gu
Seoul 130-722, 130-722
Korea, Republic of (South Korea)
+82 2 958 3678 (Phone)
+82 2 958 3124 (Fax)

HOME PAGE: http://www.kaistgsm.ac.kr

Sangyoon Yi

University of Southern Denmark - Department of Marketing & Management - Strategic Organization Design (SOD) Group ( email )

Campusvej 55
DK-5230 Odense, 5000
Denmark

HOME PAGE: http://www.sod-research.com/sangyoon-yi

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