Robust analogizing and the outside view: Two empirical tests of case-based decision making

Strategic Management Journal

Volumn 33, Issue 5, 2012, Pages 496-512

  Lovallo, Dan ^a   Clarke, Carmina ^b   Camerer, Colin ^c  

^a UNIVERSITY OF SYDNEY   (Australia)

^b Macquarie Group Limited   (Australia)

^c CALIFORNIA INSTITUTE OF TECHNOLOGY   (United States)

Author keywords

analogies; box office prediction; case based decision theory; reference class forecasting; strategic decision making

Indexed keywords

ANALOGIES; BEST DECISION; BOX OFFICE; DECISION MAKERS; EMPIRICAL TEST; INVESTMENT DECISIONS; NEW MODEL; REGRESSION MODEL; REVENUE FORECASTS; STRATEGIC DECISION MAKING; STRATEGIC DECISIONS;

FORECASTING; INVESTMENTS; REGRESSION ANALYSIS;

DECISION MAKING;

EID: 84858072796     PISSN: 01432095     EISSN: 10970266     Source Type: Journal    
DOI: 10.1002/smj.962     Document Type: Article

References (67)

1. Acs Z, Audretsch D,. 1988. Innovation in large and small firms: an empirical analysis. American Economic Review 78 (4): 678-690.
2. Baldwin J,. 1998. The Dynamics of Industrial Competition: A North American Perspective. Cambridge University Press: Cambridge, UK.
3. Barney J,. 1991. Firm resources and sustained competitive advantage. Journal of Management 17 (1): 99-120.
4. Bartlett CA,. 2005. EMI and CT scanner [A] and [B]. Cases to accompany contemporary strategy analysis. HBSl Teaching Note 384-030. Harvard Business School: Boston, MA.
5. Basuroy S, Chatterjee S, Ravid SA,. 2003. How critical are critical reviews? The box office effects of film critics, star power, and budgets. Journal of Marketing 67 (4): 103-117. (Pubitemid 37347413)
6. Buehler R, Griffin D, Ross M,. 1994. Exploring the planning fallacy: why people underestimate their task completion times. Journal of Personality and Social Psychology 67 (3): 366-381.
7. Carroll G,. 1984. Organizational ecology. Annual Review of Sociology 10 (1): 71-93.
8. Collins A, Hand C, Snell M,. 2002. What makes a blockbuster? Economic analysis of firm success in the United Kingdom. Managerial and Decision Economics 23: 343-354.
9. Desai KK, Basuroy S,. 2005. Interactive influence of genre familiarity, star power, and critics' reviews in the cultural goods industry: the case of motion pictures. Psychology & Marketing 22 (3): 203-223. (Pubitemid 40305968)
10. De Vany A, Walls WD,. 1999. Uncertainty in the movie industry: does star power reduce the terror of the box office? Journal of Cultural Economics 23: 285-318.
11. Dubin F, Lovallo D,. 2008. The use and misuse of analogies in business: an experimental approach. Working paper, University of Sydney: Sydney, Australia.
12. Dunne T, Roberts M, Samuelson L,. 1988. Patterns of firm entry and exit in U.S. manufacturing industries. RAND Journal of Economics 19 (4): 495-515.
13. Dunne T, Roberts M, Samuelson L,. 1989. The growth and failure of U.S. manufacturing plants. Quarterly Journal of Economics 104 (4): 671-698.
14. Elberse A, Eliashberg J,. 2003. Demand and supply dynamics for sequentially released products in international markets: the case of motion pictures. Marketing Science 22 (3): 329-354.
15. Eliashberg J, Sawhney MS,. 1996. A parsimonious model for forecasting gross box-office revenues of motion pictures. Marketing Science 15 (2): 113-131.
16. Eliashberg J, Shugan SM,. 1997. Film critics: influencers or predictors? Journal of Marketing 61 (2): 68-78.
17. Fischoff B, Beyth R,. 1975. I knew it would happen: remembered probabilities of once-future things. Organizational Behavior and Human Performance 13 (1): 1-16.
18. Flyvbjerg B, Holm M, Buhl S,. 2002. Underestimating costs in public works projects: error or lie? Journal of the American Planning Association 68 (3): 279-295.
19. Gavetti G, Levinthal DA, Rivkin JW,. 2005. Strategy making in novel and complex worlds: the power of analogy. Strategic Management Journal 26 (8): 691-712. (Pubitemid 40948524)
20. Gavetti G, Rivkin JW,. 2005. How strategists really think: tapping the power of analogy. Harvard Business Review 83 (4): 54-63. (Pubitemid 40448066)
21. Gayer G, Gilboa I, Lieberman O,. 2004. Rule-based and case-based reasoning in housing prices. Cowles Foundation Discussion Paper No. 1493. Yale University: New Haven, CT.
22. Gentner D, Holyoak KJ,. 1997. Reasoning and learning by analogy. American Psychologist 52 (1): 45-56.
23. Gentner D, Holyoak K, Kokinov B,. 2001. The Analogical Mind: Perspectives from Cognitive Science. MIT Press: Cambridge, MA.
24. Geroski P, Schwalbach J, (eds). 1991. Entry and Market Contestability. Basil Blackwell: Oxford, UK.
25. Gilboa I, Schmeidler D,. 1995. Case-based decision theory. Quarterly Journal of Economics 110 (3): 605-639.
26. Gilboa I, Schmeidler D,. 2001. A Theory of Case-Based Decisions. Cambridge University Press: Cambridge, UK.
27. Gilovich T,. 1981. Seeing the past in the present: the effect of associations to familiar events on judgments and decisions. Journal of Personality and Social Psychology 40 (5): 797-808.
28. Gonzalez AJ, Laureano-Ortiz R,. 1992. A case-based reasoning approach to real estate property appraisal. Expert Systems with Applications 4 (2): 229-246.
29. Gort M, Klepper S,. 1982. Time paths in the diffusion of product innovations. Economic Journal 90 (367): 630-653.
30. Green KC, Armstrong JS,. 2007. Structured analogies for forecasting. International Journal of Forecasting 23: 365-376.
31. Guber Peter,. 2007. The four truths of the storyteller. Harvard Business Review 85 (2): 52-59.
32. Hast A, (ed). 1992. International Directory of Company Histories. James Press: London, UK.
33. Heath C, Heath D,. 2007. Made to Stick. Random House: New York.
34. Hennig-Thurau T, Houston MB, Walsh G,. 2003. The differing role of success drivers across sequential channels. Working paper no. 3. Bauhaus-University of Weimar: Weimar, Germany.
35. Kahneman D, Lovallo D,. 1993. Timid choices and bold forecasts: a cognitive perspective on risk taking. Management Science 39 (1): 17-31.
36. Kahneman D, Tversky A,. 1979. Intuitive predictions: biases and corrective procedures. Management Science 12: 313-327.
37. Klepper S,. 1997. Industry life cycles. Industrial and Corporate Change 6 (1): 145-181. (Pubitemid 127662026)
38. Litman BR,. 1983. Predicting success of theatrical movies: an empirical-study. Journal of Popular Culture 16 (4): 159-175.
39. Lovallo D, Kahneman D,. 2003. Delusions of success: how optimism undermines executives' decisions. Harvard Business Review 81: 56-63.
40. May E,. 1973. 'Lessons' of the Past: The Use and Misuse of History in American Foreign Policy. Oxford University Press: New York.
41. Merrow EM, Phillips PE, Meyers CW,. 1981. Understanding Cost Growth and Performance Shortfalls in Pioneer Process Plants. Rand Corporation: Santa Monica, CA.
42. Mitchell W,. 1989. Whether and when? Probability and timing of incumbents' entry into emerging industrial subfields. Administrative Science Quarterly 34 (2): 208-230.
43. Neelamegham R, Chintagunta P,. 1999. A Bayesian model to forecast new product performance in domenstic and international markets. Marketing Science 18 (2): 115-136.
44. Nielsen EDI,. 2005. FilmSource.http://www.filmsource.com (24 March, 2005).
45. Perkins EJ,. 1999. Wall Street to Main Street: Charles Merrill and Middle-class Investors. Cambridge University Press: Cambridge, UK.
46. Porter M,. 1980. Competitive Strategy: Techniques for Analyzing Industries and Competitors: With a New Introduction. Free Press: New York.
47. Postman L, Phillips L,. 1965. Short-term temporal changes in free recall. Quarterly Journal of Experimental Psychology 17 (2): 132-138.
48. Prag J, Casavant J,. 1994. An empirical study of the determinants of revenues and marketing expenditures in the motion pricture industry. Journal of Cultural Economics 18: 217-235.
49. Ravid SA,. 1999. Information, blockbusters, and stars: a study of the film industry. Journal of Business 72 (4): 463-492.
50. Reinstein DA., Snyder CM,. 2005. The influence of expert reviews on consumer demand for experience goods: a case study of movie critics. Journal of Industrial Economics 53 (1): 27-51. (Pubitemid 40482860)
51. Ricks T,. 2006. Fiasco: The American Military Adventure in Iraq. Penguin Group: New York.
52. Rumelt R,. 1974. Strategy, Structure, and Economic Performance. Harvard Business School: Boston, MA.
53. Savage LJ,. 1954. The Foundations of Statistics. Wiley: New York.
54. Shugan SM,. 2000. Recent research on the motion picture industry. In Proceedings of the Inaugural Business and Economics Scholars Workshop in Motion Picture Industry Studies, Eliashberg J, Mallen B, (eds). Carl DeSantis Business and Economics Center for the Study and Development of the Motion Picture and Entertainment Industry: Florida Atlantic University College of Business: Boca Raton, FL; 65-86.
55. Shugan SM, Swait J,. 2000. Enabling movie design and cumulative box office predictions using historical data and consumer intent-to-vie. Advertising Research Foundation Entertaiment Conference Proceedings, Beverly Hills, CA, 1-2 November.
56. Simonoff J, Sparrow I,. 2000. Predicting movie grosses: winners and losers, blockbusters and sleepers. Chance 13 (3): 15-24.
57. Smith SP, Smith VK,. 1986. Successful movies: a preliminary empirical analysis. Applied Economics 18 (5): 501-507.
58. Sochay S,. 1994. Predicting the performance of motion pictures. Journal of Media Economics 7 (4): 1-20.
59. Stemberg TG,. 1996. Staples for Success: From Business Plan to Billion-dollar Business in Just a Decade. Knowledge Exchange: Santa Monica, CA.
60. Teece D,. 1988. Capturing value from technological innovation: integration, strategic partnering, and licensing decisions. Interfaces 18 (2): 46-61.
61. Tversky A, Kahneman D,. 1973. Availability: a heuristic for judging frequency and probability. Cognitive Psychology 5 (2): 207-232.
62. Vogel HL,. 2001. Entertainment Industry Economics. A Guide for Financial Analysis. Cambridge University Press: New York.
63. Waguespack DM, Sorenson O,. 2011. The ratings game: asymmetry classification. Organization Science 22 (3): 541-553.
64. Watson I, Marir F,. 1994. Case-based reasoning: a review. Knowledge Engineering Review 9: 355-381.
65. Woodward B,. 2002. Bush at War. Simon and Schuster: New York.
66. Woodward B,. 2004. Plan of Attack. Simon and Schuster: New York.
67. Woodward B,. 2006. State of Denial. Simon and Schuster: London, UK.