Research Seminar, Dirk MARTIGNONI
November 29, 2016 - 12:15
Guest Speaker: Dirk MARTIGNONI (Università della Svizzera Italiana)
When Ignorance Is Bliss - The Negative Effects Of Positive Knowledge
Venue: SKEMA Business School, Sophia-Antipolis Campus - room 278
There is much consensus that knowledge is an important and valuable asset in many industries. In the context of organizational choice and decision-making, knowledge is valuable because it allows firms to make informed and better choices. Both “positive knowledge”, i.e. knowing what does work and “negative knowledge”, i.e. knowing what does not work, can help improve organizational choices. Using an n-armed bandit model, we seek to answer the question when (and why) endowments with positive or negative knowledge become particular valuable starting points for learning processes. We identify conditions when positive is more valuable than negative knowledge (and vice versa). We also find that negative knowledge always has a positive value, why positive knowledge can have negative values. These findings have important implications for both theory and practice.