Articles

A Mathematical Turn in Business Regulation: The Rise of Legal Indicators

D. RESTREPO AMARILES

International Journal of Law in Context

Forthcoming


A primal condition for approachability with partial monitoring

S. MANNOR, V. PERCHET, G. STOLTZ

Journal of Dynamics and Games

Forthcoming

Departments: Economics & Decision Sciences, GREGHEC (CNRS)


A structural approach to handling endogeneity in strategic management: the case of RBV

A. NANDIALATH, J. DOTSON, R. DURAND

European Management Review

Forthcoming

Departments: Strategy & Business Policy, GREGHEC (CNRS)

Keywords: resource based view; Bayesian modeling; endogeneity; structural modeling; competitive strategy


In this paper we posit that the lack of consensus about empirical tests of resource based view (RBV) could be the result of endogenous resource picking on the part of firms. If resources are endogenously selected, regression based methods that examine their connection to firm performance will be mis-estimated. We show that traditional remedies for endogeneity do not resolve this problem when returns to resources are heterogeneous (as theorized under RBV) and when managers act with at least partial knowledge of the expected, idiosyncratic return (as theorized under the strategic factor market hypotheses). As such, we develop a Bayesian approach that solves this endogeneity problem by directly incorporating resource picking into the modeling framework. We illustrate the validity of our approach through the use of a comprehensive simulation study and show that our proposed approach outperforms traditional linear models (including traditional cures of endogeneity and unobserved heterogeneity) under a variety of conditions. Our findings suggest that: (1) research in strategy requires a more careful and deeper understanding of potential sources of endogeneity and (2) the use of Bayesian methods in management can help develop more theoretically motivated empirical approaches to hypothesis testing

Ambiguity and the Bayesian Approach

I. GILBOA, M. MARINACCI

Advances in Economics and Econometrics: Theory and Applications

Forthcoming

Departments: Economics & Decision Sciences, GREGHEC (CNRS)


Approval Voting and Arrow's Impossibility Theorem

P. MONGIN, F. MANIQUET

Social Choice and Welfare

Forthcoming

Departments: Economics & Decision Sciences, GREGHEC (CNRS)