Strategic Imitation Research Articles

Attract and Repel - How CEO Similarity Directs Strategic Imitation Following Underperformance

Attract and Repel - How CEO Similarity Directs Strategic Imitation Following Underperformance

Innovative search and imitation heuristics: an agent-based simulation study

AbstractProminent research in strategic imitation, exploration, exploitation, and organizational learning identifies imitation as a less costly alternative to experimentation. Yet, its role in the exploration–exploitation dilemma remains underexplored in the literature. This study employs an agent-based model to examine how two distinct agent types—those who imitate and those who experiment—interact and influence each other. The model incorporates the concept of “satisficing” derived from the behavioral theory of the firm, along with insights from research on imitative heuristics. The findings reveal that overcrowding affects both agent types negatively. Imitators suffer from diminished performance due to intensified competition, which increases as more imitators join the system. Meanwhile, explorers are hindered in their attempts at radical innovation due to the presence of other explorers and clusters of imitators. This paper contributes to the field as the first to model individual agents as ‘satisficers’ within a competitive exploration–exploitation framework. By incorporating imitation, it provides novel insights into the dynamics of organizational learning and strategic decision-making.

Racing to the bottom or the top? Strategic interaction of environmental protection expenditure among prefecture-level cities in China

Competition and cooperation in the environmental governance of cities are popular around the world. However, empirical research based on the prefecture-level city level in China is rare. Since the central government of China proposed to strengthen the construction of ecological civilization, whether there are strategic interactions of “race to the bottom” or “race to the top” among local governments is an important issue of academic and public interest. This paper constructs a game-theoretic model to reveal the strategic interactions of environmental governance among local governments. And then, based on the data of 221 prefecture-level cities collected from 2007 to 2018, the spatial econometric model is used to conduct multi-dimensional testing “race to the bottom” behavior of environmental protection expenditure among local governments. Moreover, this paper further analyses the impact of performance assessment indicators on the strategic interactions of local governments, so as to provide policy reference for improving environmental public welfare. Empirical results suggest that local governments in China show strategic imitation in environmental protection spending decisions, which is manifested as “race to the bottom”, and this behavior is gradually weakening with the strengthening of environmental protection assessment. Furthermore, environmental performance indicators relieve the government's strategic imitation, while economic performance indicators intensify the government's strategy imitation. Thus, reasonable performance evaluation indicators are conducive to benign strategic interaction among governments. Finally, the current environmental protection expenditure has not yet significantly affected pollution reduction, providing new evidence for the “race to the bottom” behavior of local governments. Based on the findings of our study, the central government should optimize the performance evaluation system of local officials and strengthen the implementation of the environmental supervision system and accountability mechanism. Meanwhile, the local governments should further increase environmental protection expenditure, and enhance the supervision and utilization efficiency of environmental protection funds.

Learning and strategic imitation in modelling farmers’ dynamic decisions on bovine viral diarrhoea vaccination

Considering human decision-making is essential for understanding the mechanisms underlying the propagation of real-life diseases. We present an extension of a model for pathogen spread that considers farmers’ dynamic decision-making regarding the adoption of a control measure in their own herd. Farmers can take into account the decisions and observed costs of their trade partners or of their geographic neighbours. The model and construction of such costs are adapted to the case of bovine viral diarrhoea, for which an individual-based stochastic model is considered. Simulation results suggest that obtaining information from geographic neighbours might lead to a better control of bovine viral diarrhoea than considering information from trade partners. In particular, using information from all geographic neighbours at each decision time seems to be more beneficial than considering only the information from one geographic neighbour or trade partner at each time. This study highlights the central role that social dynamics among farmers can take in the spread and control of bovine viral diarrhoea, providing insights into how public policy efforts could be targeted in order to increase voluntary vaccination uptake against this disease in endemic areas.

Investment policy of Moroccan family businesses in times of crisis: the role of cultural logics, family reputation and imitation effect

PurposeThe purpose of this research is to study the financial, family, and cultural incidences on the investment policy of unlisted Moroccan family firms passed on to the second generation or more in times of crisis.Design/methodology/approachThe design is based on an innovative methodological approach of contextualization in times of crisis with 20 unlisted Moroccan family firms, 3 sociologists and 2 researcher-experts in times of crisis.FindingsThis research work gives rise to a result that can be summarized through a logic of combined rationality. Explicitly, in the family business, it is necessary to combine the two effects: financial rationality in times of crisis, and the emotionality that reigns in family logic (everything that is culture, family traditions and psychological backgrounds) to make arbitrations in terms of investments.Originality/valueThus, the originality of this research is rooted by a field made up of transmitted Moroccan family firms. The major problems related to the investment of the family firm begin to emerge once there are a multitude of generations involved in the management. This accentuates the family and socio-cultural effects of family reputation and religiosity and the firm's strategic imitation. In this sense, this paper proposes a way forward in the research on family businesses, by integrating family and cultural logics following a hybrid approach that integrates these factors with classical financial logics.

Peer Effect of Government Awards: The Case of R&D Certifications in China

Prior research on the competitive dynamics and strategic imitation has emphasized how firms strategically response to peer pressure by following their actions. While this stream of literature has mostly focused on firms’ substantive engagement and similar behavior, no effort has identified the state incentive and extended it to the innovation field. Using the longitudinal dataset of Chinese publicly firms from 2001 to 2016, this paper first attempt to integrate the peer effect research, state sponsorship literature, and the literature on the political championships, studying how peer firms’ R&D certifications shape the firms’ innovation outcomes. Specifically, we argue that when peer firms receive more R&D certifications from government, firms will perceive more peer pressure and then are more likely to engage in innovation activities in order to attract attentions, resources, and favorable policies from policy makers and maintain their competitive advantages. Furthermore, we explore the contingency values of government growth target, political career incentive, and government innovation focus, to undertake how the political championships mechanism coordinates with market competition logic. Our work enriches the knowledge of peer effect and the innovation research by clarifying interplay between political and market competition.

From race-to-the-bottom to strategic imitation: how does political competition impact the environmental enforcement of local governments in China?

In China, national environmental regulations have customarily found themselves to be inhibited by local government's ostensible obedience. This research investigates how local officials, motivated and constrained by political competition, dedicate themselves to the environment and interact with each other regarding environmental regulation implementation and actual regulatory performance. Based on a spatial econometric model using data from 30 provinces from 2000 to 2016, the empirical results document the spatial dependence of environmental regulatory enforcement among provinces of similar economic levels and reveal that since 2007, there has been a performance-oriented peer competition for SO2 emission reduction but no similar competition for CO2 emission reduction. The findings indicate a transformation of the regulatory behavior of local governments from a race-to-the-bottom to strategic imitation and provide institutional insight into the spatial attributes of environmental enforcement under the impact of the political regime in China.

The creativity of imitation in remake videos

A growth in the popularity of remix culture has led to the phenomenon of people creating videos that explicitly imitate or copy an original work. In order to explore the potential educational value of the remake video phenomenon, we conducted a content analysis of 93 videos that were inspired by “Love Language,” a sentimental narrative video that features the themes of budding romance and disability awareness. Some remake videos attempt to closely match the original work in both content and form. Other producers are inspired by the original work and create remakes that diverge considerably in content, format, and cinematograph. Using content analysis, we examined the ratio of imitation to originality for content, form, and cinematographic variables. Most remakes include careful imitation of narrative story elements, with evidence of originality found in the depiction of social relationships. Format and cinematographic codes reveal less strict imitation. The production of remake videos may enhance media literacy competencies by offering a means for young media makers to develop creative skills through strategic imitation.

Consensus and Information Cascades in Game-Theoretic Imitation Dynamics with Static and Dynamic Network Topologies

We construct a model of strategic imitation in an arbitrary network of players who interact through an additive game. Assuming a discrete time update, we show a condition under which the resulting difference equations converge to consensus. Two conjectures on general convergence are also discussed. We then consider the case where players not only may choose their strategies, but also affect their local topology. We show that for prisoner's dilemma, the graph structure converges to a set of disconnected cliques and strategic consensus occurs in each clique. Several examples from various matrix games are provided. A variation of the model is then used to create a simple model for the spreading of trends, or information cascades in (e.g., social) networks. We provide theoretical and empirical results on the trend-spreading model.

The diffusion of corporate social responsibility through social network ties: From the perspective of strategic imitation

AbstractDrawing on institutional and organizational learning theories, this study empirically investigates the imitation of corporate social responsibility (CSR) between firms tied by board interlocks, an important type of corporate social network tie. We propose a positive relationship between the CSR engagement of a focal firm and that of its tied‐to partners and examine how this relationship is moderated by the characteristics of both the focal and tied‐to firms. Using a sample of Chinese‐listed companies, empirical evidence is provided to show that a firm's engagement in symbolic CSR is in a positive relationship with that of its tied‐to partners; this relationship becomes stronger for smaller firms and those facing high uncertainty. Furthermore, when firms are linked to smaller firms, this relationship becomes more prominent. Our findings contribute to the CSR and social network literature, as well as the research on strategic imitation. Finally, implications for business management and government policy are discussed.

Investigating Factors that Lead Entrepreneurs to Pursue Imitation Opportunities

In this paper we investigate the conditions under which entrepreneurs find it attractive to pursue imitation opportunities, and how individual cognitive differences affect such assessments. We draw upon theories of strategic imitation to develop testable hypotheses for advancing the current understanding about entrepreneurs’ opportunity assessment decisions. Using a conjoint experimental design and 1824 assessments nested within 76 founder entrepreneurs, we find that entrepreneurs consider the imitation opportunities as more attractive when market pioneers are in the growth stage than when they are in the initial or mature stage, and when the complexity of market pioneers’ distribution channels and supply chains is low. Moreover, we find that imitation opportunities are more attractive for entrepreneurs who are more prevention focused than promotion focused and have higher entrepreneurial self-efficacy. The positive impact of entrepreneurial self-efficacy is even stronger when market pioneers are in the initial stage. Our study sheds new light on the literature of entrepreneurs’ opportunity assessment decisions. It cautions future work to investigate the differences between novel and imitation opportunities.

Not All Ties Are Equal: CEO Outside Directorships and Strategic Imitation in R&D Investment

Prior research has identified two different sources of strategic imitation—through perceived organizational cluster similarity (cluster effects) and direct social connections (tied-to effects). In the research on tied-to effects, top executives’ social ties, such as outside directorships, have long been studied as a mechanism through which strategic imitation develops. However, are all ties the same? There has been little examination of whether some social ties have more influence than others. Using the attention-based view of the firm, we argue that certain social ties garner more attention by being salient to top executives. We empirically test this assertion by examining the effects of CEO outside directorships on R&D spending. Using panel data from large U.S. manufacturing firms, we find that CEOs imitate the R&D intensity of tied-to firms (i.e., a firm in which the CEO serves as an outside board member) in their own firm’s R&D decisions. Consistent with attention-based arguments, our results show evidence of selective imitation, as imitating relationships are stronger when the CEO has longer tenure as a director of a tied-to firm and the tied-to firm is performing well. In contrast to conventional institutional theory, our findings also show that CEOs imitate relatively smaller tied-to firms when they make R&D investment decisions. Not all social ties have equal influence on imitative strategic decision making; thus, they have different strategic implications.

Market Positioning by IT Service Vendors Through Imitation

Information technology (IT) services vendors operate in a highly competitive but also institutional environment that render their service-line offerings mutually observable. This suggests that imitation of rivals’ decisions can be an efficient means for IT vendors when reconfiguring their service-line offerings. To explore how such imitation unfolds in this sector, we estimate a series of logistic regression models of 116 IT vendors’ service-line choices over three time periods. First, from the strategic imitation literature we identify the key imitation “referents,” which is a group of firms or a single firm with specific traits, and we test the relative influence of each referent. All of our analysis includes these referents as predictors of service-line choice. Next, we tested more nuanced models using theoretically guided subsamples as follows. One, based on information systems (IS) literature, we consider the IT vendors as embedded in three distinct “institutional spheres,” each corresponding to a knowledge domain, namely, technical, functional, and vertical industry domains. We separately examine imitation in each subsample corresponding to the three types of service lines. Two, based on strategy literature, we consider that the influence of the imitation referents differs when the choice under consideration is the addition of a new service line versus a withdrawal. Our results across all of these subsamples uncover a nuanced pattern of imitation that sometimes contrasts the full-sample results. The most prominent result is that although imitation is highly salient, the different imitation referents are not universally influential across all knowledge domains and between development versus withdrawal decisions. Specifically, the imitation of similar firms is widespread, whereas the imitation of largest firms or offering popular service-lines, which indicates bandwagon effects, are at play only selectively. This study contributes to the IS literature by laying a basis for a variety of research directions including resource spillovers and vicarious learning in IT sectors.

Fiscal Expenditure Competition of China's Local Governments: The Characteristics and Its Effects on Capital Allocation

Chinese fiscal decentralization reform inspires the local governments’ enthusiasm of developing region’s economy and intensifies the competition between local governments. Using a large dataset at city level from 1985 to 2012, this paper analyzes the characteristic and regional difference of fiscal expenditure competition, and studies the effects of expenditure competition on capital allocation. The estimation results show that imitative interaction of productive expenditure has positive effect on capital allocation efficiency, while the strategic imitation of social expenditure and administration expenses impede efficient allocation of capital. The different effects can be contributed to the essential characteristic of fiscal competition in China. Finally, it is propose that the official's achievement assessment system based on economic growth rate should be reformed. A more perfect performance assessment system should conclude not only local GDP but also the productivity of the public services and recourses allocation efficiency.

Social and strategic imitation: the way to consensus

Humans do not always make rational choices, a fact that experimental economics is putting on solid grounds. The social context plays an important role in determining our actions, and often we imitate friends or acquaintances without any strategic consideration. We explore here the interplay between strategic and social imitative behavior in a coordination problem on a social network. We observe that for interactions on 1D and 2D lattices any amount of social imitation prevents the freezing of the network in domains with different conventions, thus leading to global consensus. For interactions on complex networks, the interplay of social and strategic imitation also drives the system towards global consensus while neither dynamics alone does. We find an optimum value for the combination of imitative behaviors to reach consensus in a minimum time, and two different dynamical regimes to approach it: exponential when social imitation predominates, power-law when strategic considerations prevail.

Keeping Up with the Joneses: Imitation of Service Capabilities by IT Outsourcing Vendors

Information technology (IT) services vendors operate in a highly competitive but also institutional environment that render their service-line offerings mutually observable. This suggests that imitation of rivals’ decisions can be an efficient means for IT vendors when reconfiguring their service-line offerings. To explore how such imitation unfolds in this sector, we estimate a series of logistic regression models of 116 IT vendors’ service-line choices over three time periods. First, from the strategic imitation literature we identify the key imitation ‘referents’, which is a group of firms or a single firm with specific traits, and we test the relative influence of each referent. All our analysis includes these referents as predictors of service-line choice. Next, we tested more nuanced models using theoretically-guided subsamples as follows. One, based on IS literature, we consider the IT vendors as embedded in three distinct ‘institutional spheres’, each corresponding to a knowledge domain - namely, technical, functional and vertical industry domains. We separately examine imitation in each subsample corresponding to the services lines within each knowledge domain. Two, based on strategy literature, we consider that the influence of the imitation referents differs when the choice under consideration is the addition of a new service-line versus a withdrawal. Our results across all these subsamples uncover a nuanced pattern of imitation which sometimes contrasts the full-sample results. The most prominent result is that although imitation is highly salient, the different imitation referents are not universally influential across all knowledge domains and between development versus withdrawal decisions. Specifically, the imitation of similar firms is widespread while the imitation of largest firms or offering popular service-lines, which indicates bandwagon effects, are at play only selectively. This study contributes to the IS literature by laying a basis for a variety of research directions including resource spillovers and vicarious learning in IT sectors.

Der Erfolg von Insidertransaktionen – Timing oder Fundamentalbewertung?

The Success of Insider Transactions – Timing or Fundamental Valuation The present article confirms the profitability of insider transactions in the German stock market and analyses the reasons explaining this success. We have identified three such reasons: 1) The investment behaviour of insiders is consistent with an investment strategy based on fundamental valuation of the respective undertaking. 2) Moreover, insider transactions are the source of timing information, because insiders are still successful to a certain degree even in the event of adverse fundamental valuation results. 3) In terms of strategic imitation, it is best to combine the information on insider transactions with the fundamental valuation results. Finally, we have identified the most important factors influencing the level of accumulated abnormal returns. Der Erfolg von Insidertransaktionen – Timing oder Fundamentalbewertung Die vorliegende Arbeit bestätigt die Profitabilität von Insidertransaktionen am deutschen Aktienmarkt und untersucht die Gründe für den Erfolg. Hierbei kommen wir zu drei Ergebnissen: 1. Das Investitionsverhalten der Insider ist konsistent mit einer Investmentstrategie, die auf einer fundamentalen Bewertung des Unternehmens aufbaut. 2. Insidertransaktionen liefern darüber hinaus Timing-informationen, da die Insider auch bei einer schlechten Fundamentalbewertung noch bedingt erfolgreich sind. 3. Für eine Nachahmerstrategie ist es am günstigsten, die Informationen über Insidertransaktionen mit der fundamentalen Bewertung zu kombinieren. Abschließend identifizieren wir die wichtigsten Einflussgrößen auf die Höhe der kumulierten abnormalen Renditen. (JEL G12, G14)

Serving the Public Interest

We present a model of political selection in which voters elect a president from a set of candidates. We assume that some of the candidates are benevolent and that all voters prefer a benevolent president, i.e. a president who serves the public interest. Yet, political selection may fail in our model because voters cannot easily tell benevolent from egoistic candidates by observing their pre-election behavior. Egoistic types may strategically imitate benevolent types in the pre-election stage to extract rents once in office. We show that strategic imitation is less likely if the political system is likely to produce good governance. That is, if benevolent candidates are common, if the president has little discretionary power, and if the public sector is effective. We analyze the role of institutions like investigative media and re-election and show that they can improve or further hamper political selection, depending on the parameters of the political game.

Evolutionary minority games with small-world interactions

In the evolutionary minority game (EMG), agents compete for a limited resource and are rewarded if they correctly select the minority behaviour. At each time step, agents make their decision based on the aggregate history of past moves and an internal parameter—the probability that the individual follows the given strategy. In this study, the effects of strategic imitation among agents are examined. Here, I combine and extend previous work using local information transmission mechanisms to promote coordination in the population. Extensive numerical simulations using different network architectures, ranging from regular lattices to random networks, are used to investigate the population dynamics. The results suggest that agents sharing information in small-world networks can coordinate their behaviour more effectively than agents playing the standard EMG. However, both the network re-wiring probability and level of imitation significantly impact on performance.

The Origins of Nonliberal Capitalism: Germany and Japan in Comparison. Edited by Wolfgang Streeck and Kozo Yamamura. Ithaca, NY: Cornell University Press, 2001. Pp. xvii, 261.

This volume explores phenomena frequently noted (yet seldom analyzed) in the scholarly literature: the profound similarities in the industrialization processes and the contemporary political economies of Germany and Japan. These parallels—not just in the early stages of industrialization, but through the experiences of depression and war, and on to the rise of postwar “miracle” economies in both nations—are often casually ascribed to the late-developer effect, to the strategic imitation of German economic institutions in Japan, or to cultural factors, from lingering “feudal remnants” to enduring “traditional” social structures. Tagging the economic regimes which had evolved in Germany and Japan by the 1970s “nonliberal” capitalist systems, the essays in this collection seek to investigate systematically “the many similarities between the two capitalisms, the no less intriguing differences between them, and the differences between the two and Anglo-American ‘standard capitalism’” (p. xiii). More specifically, this volume examines “the origins of some of the social institutions that have constrained the spread of free markets within the capitalist economies of Germany and Japan while providing them with alternate mechanisms of economic governance” (p. 5). Throughout, the contributors argue for a more subtle, historically grounded, and systematic understanding of the distinctive practices and institutions of the German and Japanese “nationally embedded capitalisms.”