Initial Luck, Status-Seeking and Snowballs Lead to Corporate Success and Failure

23 Pages Posted: 29 Jun 2004

See all articles by Amihai Glazer

Amihai Glazer

University of California, Irvine - Department of Economics

Vesa Kanniainen

University of Helsinki - Department of Political and Economic Studies; CESifo (Center for Economic Studies and Ifo Institute)

Panu Poutvaara

University of Helsinki - Department of Economics; Helsinki Center of Economic Research (HECER); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: December 2004

Abstract

Corporate success often resembles a snowball. We show how initial luck in hiring talented people, the resulting technological advantage, superior corporate culture, and status-seeking by workers can make small initial differences generate large differences over time.

Keywords: industry equilibrium, initial luck, status effects

JEL Classification: L00, L13

Suggested Citation

Glazer, Amihai and Kanniainen, Vesa and Poutvaara, Panu, Initial Luck, Status-Seeking and Snowballs Lead to Corporate Success and Failure (December 2004). IZA Discussion Paper No. 1426; CESifo Working Paper Series No. 1216. Available at SSRN: https://ssrn.com/abstract=560261

Amihai Glazer (Contact Author)

University of California, Irvine - Department of Economics ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States
949-854-6563 (Phone)
949-824-2182 (Fax)

Vesa Kanniainen

University of Helsinki - Department of Political and Economic Studies ( email )

P.O. Box 54
FIN-00014 Helsinki
Finland
+358-0-9-1911 (Phone)
+358-0-191-8877 (Fax)

HOME PAGE: http://www.cesifo.de

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Panu Poutvaara

University of Helsinki - Department of Economics ( email )

P.O. Box 54
FIN-00014 Helsinki
Finland

HOME PAGE: http://www.valt.helsinki.fi/blogs/poutvaar/

Helsinki Center of Economic Research (HECER) ( email )

FI-00014 Helsinki
Finland

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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