The Sequence Effect on the Selection of R&D Projects in Panel Decision-Making

44 Pages Posted: 16 Sep 2020

See all articles by Paola Criscuolo

Paola Criscuolo

Imperial College Business School

Linus Dahlander

ESMT European School of Management and Technology

Thorsten Grohsjean

Bocconi University - Department of Management and Technology

Ammon Salter

University of Bath - School of Management

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Date Written: July 5, 2020

Abstract

We examine how groups fall prey to the sequence effect when they make choices based on informed assessments of complex situations; for example, when evaluating research and development (R&D) projects. The core argument is that the temporal sequence of selection matters because projects that appear in a sequence following a funded project are themselves less likely to receive funding. Building on the idea that selecting R&D projects is a demanding process that drains participants’ mental and emotional resources, we further theorize the moderating effect of the influence of the timing of the panel meeting on the sequence effect. We test these conjectures using a randomization in sequence order from several rounds of R&D project selection at a leading professional service firm. We find robust support for the existence of a sequence effect in R&D as well as for the moderating effect. We further explore different explanations for the sequence effect and how it passes from the individual to the panel. These findings have broader implications for the literatures on innovation and search in general and on group decision-making for R&D, specifically, as they suggest that a previously overlooked dimension affects selection outcomes.

Keywords: Sequence effect, law of small numbers, gambler’s fallacy, contrast effect, quota model, R&D project selection, innovation, decision-making, panel, professional service firm

Suggested Citation

Criscuolo, Paola and Dahlander, Linus and Grohsjean, Thorsten and Salter, Ammon, The Sequence Effect on the Selection of R&D Projects in Panel Decision-Making (July 5, 2020). Bocconi University Management Research Paper, Organization Science, Forthcoming, ESMT Berlin Working Paper, Available at SSRN: https://ssrn.com/abstract=3693823

Paola Criscuolo (Contact Author)

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

HOME PAGE: http://www.imperial.ac.uk/people/p.criscuolo

Linus Dahlander

ESMT European School of Management and Technology ( email )

Schlossplatz 1
10117 Berlin
Germany

Thorsten Grohsjean

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Ammon Salter

University of Bath - School of Management ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

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