We are happy to invite you to the ABRI Lunch Seminar Scientific Entrepreneurial Decision-Making in the Presence of Network Effects by dr. Joe Ploog (Strategy Department, IE University, Spain) organized by ABRI and the KIN Center for Digital Innovation.
The seminar will take place on Tuesday, February 10th, from 12:00 to 13:00 (HG-05A37).
This is a lunch seminar; please register your attendance by accepting/declining your emailed invitation by Friday, February 6th, at 10 AM at the latest (for catering).
Abstract
We study whether entrepreneurial firms launching products with the potential for network effects engage in scientific entrepreneurial decision-making differently. We propose they (1) have a higher tendency to test since product-market fit at launch is more important and (2) test more extensively since inference is more challenging when utility depends on social interactions. Since managers of firms releasing products with the potential for network effects are concerned with winner-takes-most dynamics, we also (3) suggest that competitive pressure negatively moderates this testing behavior. Analyzing data from the video games industry, we confirm our predictions about testing tendency and extent. Additional analyses of the performance implications suggest that (extended) testing is associated with higher, whereas competition-driven truncation with lower performance, suggesting firms overrespond to competition. We contribute to research on scientific entrepreneurial decision-making and network effects.