extending the cyert march duopoly model organizational and economic insights two studies were conducted to further explore the organizational and economic insights provided by the cyert march duopoly model c m described ina behavioral theory of the firm abtof cyert and march 1963 study 1 examined the extent to which two firms that differed solely in the decision behavior of a routine would also differ in organizational quasiresolution of conflict uncertainty avoidance problem driven search and organizational learning and economic profit price market share cost measures and impacts three such manipulations were separately examined where each manipulation altered the relative propensity of the firm to be more or less reactive to three events production growth pressure price adjustment under organizational goal conflict and initial price adjustment under profit goal failure analysis of the behaviors revealed how subtle changes in these key routines could generate complex organizational and economic effects that impact firm success the dominant result demonstrated that organizations that did not perform well organizationally did not perform well economically in addition higher reactivity resulted in higher costs in part because of quantified organizational constructs e g slack pressure study 2 examined the data from the first study to determine the extent to which the performance of the duopoly was consistent with a set of eight stylized economic facts drawn from the empirical literature on oligopoly study 2 demonstrated consistency with five of the eight stylized economic facts and provided partial support for two others we conclude that behavioral constructs of abtof as articulated in the cyert march duopoly model provide behavior and performance capabilities that bridge the gap between game theoretic models of duopoly and the computational and informational realities of organizations

building criminal capital behind bars peer effects in juvenile corrections this paper analyzes the influence that juvenile offenders serving time in the same correctional facility have on each other s subsequent criminal behavior the analysis is based on data on over 8 000 individuals serving time in 169 juvenile correctional facilities during a two year period in florida these data provide a complete record of past crimes facility assignments and arrests and adjudications in the year following release for each individual to control for the non random assignment to facilities we include facility fixed effects thereby estimating peer effects using only within facility variation over time we find strong evidence of peer effects for various categories of theft burglary and felony drug and weapon crimes the influence of peers primarily affects individuals who already have some experience in a particular crime category we also find evidence that peer effects are stronger in smaller facilities and that the predominant types of peer effects differ in residential versus non residential facilities effects in the latter are consistent with network formation among youth serving time close to home

adaptive learning in weighted network games abstract this paper studies adaptive learning in the class of weighted network games this class of games includes applications like research and development within interlinked firms crime within social networks the economics of pollution and defense expenditures within allied nations we show that for every weighted network game the set of pure nash equilibria is non empty and generically finite pairs of players are shown to have jointly profitable deviations from interior nash equilibria if all interaction weights are either non negative or non positive then nash equilibria are pareto inefficient we show that quite general learning processes converge to a nash equilibrium of a weighted network game if every player updates with some regularity

public goods in networks this paper considers incentives to provide goods that are non excludable along social or geographic links we find first that networks can lead to specialization in public good provision in every social network there is an equilibrium where some individuals contribute and others free ride in many networks this extreme is the only outcome second specialization can benefit society as a whole this outcome arises when contributors are linked collectively to many agents finally a new link increases access to public goods but reduces individual incentives to contribute hence overall welfare can be higher when there are holes in a network

do women choose different jobs from men mechanisms of application segregation in the market for managerial workers this paper examines differences in the jobs for which men and women apply in order to better understand gender segregation in managerial jobs we develop and test an integrative theory of why women might apply to different jobs than men we note that constraints based on gender role socialization may affect three determinants of job applications how individuals evaluate the rewards provided by different jobs whether they identify with those jobs and whether they believe that their applications will be successful we then develop hypotheses about the role of each of these decision factors in mediating gender differences in job applications we test these hypotheses using the first direct comparison of how similarly qualified men and women apply to jobs based on data on the job searches of mba students our findings indicate that women are less likely than men to apply to finance and consulting jobs and are more likely to apply to general management positions these differences are partly explained by women s preference for jobs with better anticipated work life balance their lower identification with stereotypically masculine jobs and their lower expectations of job offer success in such stereotypically masculine jobs we find no evidence that women are less likely to receive job offers in any of the fields studied these results point to some of the ways in which gender differences can become entrenched through the long term expectations and assumptions that job candidates carry with them into the application process

the intertemporal stability of the concentration margins relationship using a longitudinal data base we find that there has been a substantial narrowing of the spread between the price cost margins of concentrated and unconcentrated industries including measures of macroeconomic fluctuations into standard price cost margin regressions we find significant differences in cyclical behavior across market structure we also explore a possible explanation unionization for differences in cyclical behavior finally we investigate the degree to which our results are affected by the potential simultaneity of concentration advertising and the price cost margin

the role of past performance in export ventures a short term reactive approach this paper employs organizational learning theory to examine the short term effect of past export performance and internal management and external market forces on marketing strategy adaptation and current export performance results from a survey of over 500 export managers indicate that current period performance improvement in terms of performance achievement export intensity and performance satisfaction in the current year is influenced by the firm s commitment to exporting further the authors found that while performance satisfaction feeds performance improvement in the following year both the previous year s export intensity and export performance achievement produce a negative impact on current period performance improvement more importantly the level of development in the export market facilitates marketing strategy adaptation in the short term as does export intensity in the previous year however satisfaction with previous year performance negatively influences the degree of distribution adaptation implications for international business researchers and practitioners are also discussed

near term liability of exploitation exploration and exploitation in multistage problems the classic trade off between exploration and exploitation reflects the tension between gaining new information about alternatives to improve future returns and using the information currently available to improve present returns by considering these issues in the context of a multistage as opposed to a repeated problem environment we show that exploratory behavior has value quite apart from its role in revising beliefs we show that even if current beliefs provide an unbiased characterization of the problem environment maximizing with respect to these beliefs may lead to an inferior expected payoff relative to other mechanisms that make less aggressive use of the organization s beliefs search can lead to more robust actions in multistage decision problems than maximization a benefit quite apart from its role in the updating of beliefs

network games under strategic complementarities we study network games under strategic complementarities agents are embedded in a fixed network they choose a positive continuous action and interact with their network neighbors interactions are positive and actions are bounded from above we first derive new sufficient conditions for uniqueness covering all concave as well as some non concave best responses we then study the relationship between position and action and identify situations where a more central agent always plays a higher action in equilibrium we finally analyze comparative statics we show that a shock may not propagate throughout the entire network and uncover a general pattern of decreasing interdependence

housework fixed effects and wages of married workers although the primacy of household responsibilities in determining gender differences in labor market outcomes is universally recognized there has been little investigation of the direct effect of housework on wages using data from the panel study of income dynamics cross sectional wage regressions reveal a substantial negative relation between wages and housework for wives which persists in specifications controlling for individual fixed effects the evidence for husbands is inconclusive married women s housework time is on average three times that of married men s the addition of housework time to the wage equations increases the explained component of the gender wage gap from 27 30 percent to 38 percent

discrimination empirical evidence from the united states the study of discrimination received a major impetus in the 1960 s when increasing social attention focused upon race and gender differentials in market outcomes gary becker s the economics of discrimination 1957 strongly influenced empirical research by providing a definition of wage discrimination and suggesting a specific way in which it might operate during the following years new theories were developed and refined in an attempt to explain why there appears to be continued discrimination in spite of market forces presumably operating against it similarly a large amount of empirical work has been done to determine whether and how much discrimination actually exists and to a lesser extent to test the implications of the various theories even so the hope expressed by becker in the preface of the second edition 1971 that our understanding of discrimination would increase so rapidly that the materials in his book would become obsolete before another decade began has clearly not been fulfilled here we review what has been learned in the intervening years and suggest some fruitful directions for future research 1 the focus of this paper like that of most of the empirical research in this area is on determining the extent of discrimination rather than on testing alternative models of discrimination

toward a model of risk in declining organizations an empirical examination of risk performance and decline scholars who study organizational decline have argued that declining organizations reduce or eliminate their riskier activities such as innovation further they cite reduced risk taking as a primary contributor to further decline scholars with an interest in risk per se come to the opposite conclusion low performing firms often take more risks than other firms and such risks reduce subsequent performance this study attempts to resolve these conflicting views by examining the risk of firms in decline our model based on cyert march s cyert r m j g march 1963 a behavioral theory of the firm prentice hall englewood cliffs nj behavioral theory of the firm includes six basic variables 1 performance 2 slack 3 aspirations 4 expectations 5 risk income stream uncertainty and 6 organization size as a measure of decline the estimated model includes prior levels of risk and performance in the risk and performance equations respectively as controls this study uses data on 34

peer effects and social networks in education this paper studies whether structural properties of friendship networks affect individual outcomes in education we first develop a model that shows that at the nash equilibrium the outcome of each individual embedded in a network is proportional to her katz bonacich centrality measure this measure takes into account both direct and indirect friends of each individual but puts less weight to her distant friends we then bring the model to the data by using a very detailed dataset of adolescent friendship networks we show that after controlling for observable individual characteristics and unobservable network specific factors the individual s position in a network as measured by her katz bonacich centrality is a key determinant of her level of activity a standard deviation increase in the katz bonacich centrality increases the pupil school performance by more than 7 percent of one standard deviation

peer effects in endogenous networks abstract this paper presents a model of strategic network formation with local complementarities in effort levels and positive local externalities results are obtained for a general class of payoff functions which subsumes the linear quadratic specification frequently used in theoretical and applied work we assume homogeneous agents and characterize equilibria for two sided and one sided link formation pairwise nash equilibrium networks are nested split graphs which are a strict subset of core periphery networks we highlight the relevance of the convexity of the value function for obtaining these structures more central agents are shown to exert more effort and obtain higher gross payoffs in equilibrium however net of linking cost central agents may obtain strictly lower net payoffs the curvature of the value function is also important for efficiency considerations these findings are relevant for many social and economic phenomena such as educational attainment criminal activity labor market participation and r d expenditures of firms

crime and social interactions the high variance of crime rates across time and space is one of the oldest puzzles in the social sciences this variance appears too high to be explained by changes in the exogenous costs and benefits of crime we present a model where social interactions create enough covariance across individuals to explain the high cross city variance of crime rates this model provides an index of social interactions which suggests that the amount of social interactions is highest in petty crimes moderate in more serious crimes and almost negligible in murder and rape

a sociological perspective on gender and career outcomes both economists and sociologists have documented the association between gender and career outcomes men are more likely than women to participate in the labor force and men average more hours of paid labor per week and more weeks per year women and men tend to hold different occupations and to work in different industries firms and jobs furthermore men outearn women hold more complex jobs and are more likely to supervise workers of the other sex and to dominate the top positions in their organization the challenge for both disciplines lies not in showing that gender is linked to employment outcomes but in explaining the associations economists have sought explanations in the characteristics and preferences of individual workers or employers some have attributed the associations between workers sex and their career outcomes to sex differences in training and experience career commitment or competing demands on time and energy others focus on employers preferences for workers of one sex over the other taste discrimination or on employers beliefs that workers of one sex or the other are more costly or less profitable to employ statistical discrimination the sociological approach differs from that of economists in recognizing sex segregation as a causal mechanism that gives rise to other differences between women s and men s careers this emphasis on segregation reflects sociologists interest in the ramifications of societal level systems of differentiation and stratification it stems also from the discipline s concern with the impact of people s location in social structures on a variety of life outcomes by concentrating men and women in different jobs segregation exposes them to more or less similar employment

business cycles and the relationship between concentration and price cost margins using a newly constructed panel data base we examine changes in price cost margins in 284 manufacturing industries between 1958 and 1981 a key finding is a dramatic narrowing of the spread between the margins of concentrated and unconcentrated industries over this period we provide evidence that this narrowing is a result of the greater sensitivity of price cost margins in more concentrated industries to demand fluctuations this finding is robust to the inclusion of other industry variables and to measures of import competition the results indicate that cross sectional estimates of the concentration margins relationship are likely to be both biased and misleading

tax reform unraveling the tax reform act of 1986 was widely heralded as the most significant change in our nation s tax law since the income tax was extended to the masses during world war ii it was the crowning domestic policy achievement of president ronald reagan who proclaimed it the best antipoverty measure the best pro family measure and the best job creation measure ever to come out of the congress of the united states the law s rate reductions and base broadening reforms were mimicked throughout the countries belonging to the oecd even at the time however reading the paeans to this legislation was like watching a tennessee williams play something was terribly wrong but nobody was talking about it two decades later the changes wrought by the 1986 act have proven neither revolutionary nor stable tax experts now regard the 1986 act as a promise failed the public seems to agree and considerable public support exists for a flat tax or a national sales tax to replace the income tax i shall examine the most important individual and corporate income tax changes since 1986 before turning to proposals for restructuring the nation s tax system

innovation and firm growth does firm age play a role this paper explores the relationship between innovation and firm growth for firms of different ages we hypothesize that young firms undertake riskier innovation activities which may have greater performance benefits if successful or greater losses if unsuccessful using an extensive spanish community innovation survey sample for the period 2004 2012 we apply panel quantile regressions to study the effect of r d activities on firm growth i e sales growth productivity growth and employment growth our results show that young firms face larger performance benefits from r d at the upper quantiles of the growth rate distribution but face larger decline at the lower quantiles r d investment by young firms therefore appears to significantly riskier than r d investment by more mature firms which suggests some policy implications

domestic concentration foreign trade and economic performance abstract in a competitive fringe model the impact of concentration on price cost margins can be shown to be ambiguous therefore looking at the relationship between rates of return and concentration ratios is not sufficient for perceiving collusive elements in this paper a model is set up that permits discerning collusion more clearly additional evidence concerning collusion can be gained by analyzing the influence of exports and imports on price cost margins applying this approach to west germany yields the result that the collusiveness prevailing in domestic markets has not visibly decreased in spite of a substantial increase in foreign trade

asset choice and supplier performance in two organizations us and japanese the problem of vertical integration is a venerable but increasingly important focus of attention in profit seeking organizations over the past ten years many industries have seen increased cooperation between buyers and suppliers to achieve more difficult goals caused by rising product market competition in many firms this cooperation is balanced against the putative advantages of diminishing but still substantial in house operations one way to compare the performance of cooperative suppliers with in house operations is to focus on the buyer s choice of assets used to produce the inputs needed for the final product for strategic reasons some of these assets will be highly specialized and others standardized the question this paper asks is whether this choice of specialized or standard assets influences the performance of the supplier controlling for whether it is in the market or in house the hypothesis is that the choice of specialized assets for strategic reasons is associated with lower supplier conformance with the buyer s target price for the input in other words for these assets the supplier s price which is higher than the buyer would have liked to pay reflects some of the strategic value of the input to the buyer the supplier is simply appropriating some of this value since it can raise its price with a low threat of termination by the buyer for standard assets in contrast the threat of termination is omnipresent so that the choice of assets is irrelevant for supplier price performance the test is performed using data on both in house operations and market suppliers from a quite large us manufacturing firm and on market suppliers to a very successful japanese manufacturing firm interestingly there is no difference between these firms in the applicability of the hypothesis also in house and market suppliers differ in price performance only for standard assets market suppliers performing better organizations can therefore gain quite a bit from outsourcing the production of less specialized inputs but achieve roughly the same performance from in house and market suppliers for more specialized inputs this last result is controversial and should bc tested repeatedly using other micro level data this study therefore addresses three sides of the current debate surrounding modern questions of vertical integration first does the strategic value of the input make a difference in supplier performance the answer is yes but only for specialized inputs second do in house and market suppliers differ in their performance the answer is yes but only for standardized inputs third do us and japanese firms differ in the performance of their suppliers given variation in asset specialization and strategic importance the answer is no at least for the two firms studied here all caveats regarding the generalizability of results from small sample studies apply

adaptation as information restriction the hot stove effect individuals and social systems are often portrayed as risk averse and resistant to change such propensities are characteristically attributed to individual organizational and cultural traits such as risk aversion uncertainty avoidance discounting and an unwillingness to change this paper explores an alternative interpretation of such phenomena we show how the reproduction of successful actions inherent in adaptive processes such as learning and competitive selection and reproduction results in a bias against alternatives that initially may appear to be worse than they actually are in particular learning and selection are biased against both risky and novel alternatives because the biases are products of the tendency to reproduce success that is inherent in the sequential sampling of adaptation they are reduced whenever the reproduction of success is attenuated in particular when adaptation is slowed made imprecise or recalled less reliably the propensity to engage in risky and new activities is increased these protections against the error of rejecting potentially good alternatives on inadequate experiential evidence are costly however they increase the likelihood of persisting with alternatives that are poor in the long run as well as in the short run

orchestrating impartiality the impact of blind auditions on female musicians a change in the audition procedures of symphony orchestras adoption of blind auditions with a screen to conceal the candidate s identity from the jury provides a test for sex biased hiring using data from actual auditions in an individual fixed effects framework we find that the screen increases the probability a woman will be advanced and hired although some of our estimates have large standard errors and there is one persistent effect in the opposite direction the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras

she works hard for the money household responsibilities and the allocation of work effort recent developments in human capital theory suggest that men and women differ in how they allocate effort to work activities this paper uses the 1973 and 1977 quality of employment surveys to test the assumtion that women allocate less effort to work because of their family and household responsibilities regression and ordered probit analyses show that on average women allocate more effort to work than do men further the sex difference is substantial when men and women with comparable family situations and market human capital are compared the paper discusses how experiments on sex differences in standards of personal entitlement and research on sex segregated workplaces provide an alternative to the economists perspective finally the paper argues for an integration of human capital models research on social equity and structural theories of work organization in order to provide a more complete explanation of men s and women s orientations toward work and family

finding all equilibria in games of strategic complements i present a simple and fast algorithm that finds all the pure strategy nash equilibria in games with strategic complementarities this is the first non trivial algorithm for finding all pure strategy nash equilibria

antecedents of convergence and divergence in strategic positioning the effects of performance and aspiration on the direction of strategic change this paper investigates drivers of convergence and divergence in strategic positioning in terms of resource allocation decisions the study based on the behavioral theory of the firm suggests two unexplored kinked curve relationships between performance gaps and strategic convergence divergence first the study suggests a negative relationship between a focal firm s performance relative to aspiration levels and strategic convergence divergence where the slope is steeper when performance is above the aspiration level second it suggests a positive relationship between a target firm s performance relative to a focal firm s performance and strategic convergence divergence where the slope is steeper when a target firm s performance is below a focal firm s performance empirical analysis of dyad level data in the u s food processing industry reveals that the direction of a firm s strategic change is shaped by its aspiration level its performance level and the performance gap between it and the firm it selects as a model this study contributes to the current literature by offering preliminary indications of when and how a firm moves closer to or further away from other competing firms in its strategic position

sticky aspirations organizational time perspective and competitiveness managers evaluate the organizational performance by comparing it with historical aspiration levels and are more likely to make strategic changes when the performance falls below the aspiration level historical aspiration levels can be updated with different speed because a focus on current performance will lead to quickly adjusting aspiration levels where historical performance has low weight while a focus on past performance will lead to slowly adjusting performance levels where the current performance has low weight a simulation model of aspiration level learning and strategic change under uncertainty yields the following findings 1 slow adjustments of an aspiration level gives higher performance across different levels of environmental uncertainty 2 slow adjustments of aspirations will dominate in populations with different adjustment levels if low performing organizations are removed and replaced by organizations of the form currently performing best and 3 stronger selection leads to faster domination by slow adjusters empirical analysis of format changes in radio stations finds slow adjustment of aspiration levels to be prevalent and finds slower adjustment in competitive markets as predicted

variable risk preferences and adaptive aspirations abstract observations of human decision making indicate that risk preferences depend on the values of possible outcomes relative to levels of aspiration a model of such variable risk preference is specified it suggests that some risk averse behavior may result from a human tendency to focus on targets and from the adaptation of those targets to experience rather than from a fixed trait of risk aversion in addition the model shows how risk preferences varying around adaptive aspirations produce both a greater long run likelihood of survival and a higher average return for survivors than do fixed risk preferences

market structure and market value while the use of market models to determine the sources of economic profits is quite new at least two empirical studies considering the market structure and market value relation have appeared to date interestingly they conflict thomadakis 1977 found a close positive relation between the four firm concentration ratio and relative excess valuation measured as the difference between the market value of the firm and the book value of tangible assets all normalized by sales as a result thomadakis argued that industry concentration plays a role in the determination of excess profits from currently held assets and those expected from the firm s investment options p 185 in contrast lindenberg and ross 1981 reported no significant relation between concentration and tobin s q ratio measured as the ratio of the market value of the firm to the replacement cost of tangible assets this result disputes thomadakis s findings and a purely structuralist interpretation of economic profits according to lindenberg and ross market power may or may not be evident in highly concentrated markets since high q s can occur in concentrated or unconcentrated markets and conversely low q s indicating no significant market power can occur in markets that have high degrees of concentration p 28

separate and unequal occupation establishment sex segregation and the gender wage gap the authors report the first large scale empirical investigation of within job wage differences between men and women in the same occupation and establishment using data first on blue collar and clerical employees from 16 u s industries in 1974 83 and second on employees in 10 professional and administrative occupations the authors report three findings first wage differences at the occupation establishment level were small even without controls for individual level characteristics hence within job wage discrimination was much less important than occupation establishment segregation for observed wage differences second establishment segregation was an important cause although not as important as occupational segregation of wage differences third establishment segregation was extensive as was occupational segregation

collusion versus differential efficiency testing alternative hypotheses the predictions of collusion and efficiency based static equilibrium explanations of interindustry profitability differences are formally developed and tested using appropriate econometric techniques with intraindustry data on seventy u s internal revenue service minor manufacturing industries in 1963 and 1972 none of the explanations has much explanatory power the 1963 data are consistent with collusion based models while the 1972 data are inconsistent with all non null hypotheses considered patterns of profitability are sharply different in the two years in complex ways apparently unrelated to cyclical forces or the phase ii price controls implications of these results are discussed copyright 1987 by blackwell publishing ltd

adaptive learning in international business building on daniel levinthal s seminal theories on learning adaptation and innovation this article elucidates an adaptive view of organizational learning undertaken by multinational enterprises mnes levinthal s perspectives have tremendous implications for theorizing and examining processes pathways and mechanisms of dynamic learning for mnes competing in a complex environment this article extends these perspectives considering unique organizational traits and environmental characteristics facing mnes for a more nuanced understanding of contexts in which adaptive learning creates global competitive advantage discussion also includes levinthal s perspectives that are not yet adequately extended to but valuable for ib research such as learning mindfulness cognitive search organizational architecture for adaptation and co evolution with technological change we offer additional research questions as well as possible solutions to adaptive learning for international business

rationalizability learning and equilibrium in games with strategic complementarities we study a rich class of noncooperative games that includes models of oligopoly competition macroeconomic coordination failures arms races bank runs technology adoption and diffusion r d competition pretrial bargaining coordination in teams and many others for all these games the sets of pure strategy nash equilibria correlated equilibria and rationalizable strategies have identical bounds also for a class of models of dynamic adaptive choice behavior that encompasses both best response dynamics and bayesian learning the players choices lie eventually within the same bounds these bounds are shown to vary monotonically with certain exogenous parameters we study the class of noncooperative supermodular games introduced by topkis 1979 and further analyzed by vives 1985 1989 who also pointed out the importance of these games in industrial economics supermodular games are games in which each player s strategy set is partially ordered the marginal returns to increasing one s strategy rise with increases in the competitors strategies so that the game exhibits strategic complementarity 2 and if a player s strategies are multidimensional marginal returns to any one com ponent of the player s strategy rise with increases in the other components this class turns out to encompass many of the most important economic applications of noncooperative game theory in macroeconomics diamond s 1982 search model and bryant s 1983 1984 rational expectations models can be represented as supermodular games in each of these models more activity by some members of the economy raises the returns to increased levels of activity by others in oligopoly theory some models of bertrand oligopoly with differentiated products qualify as supermodu lar games in these games when a firm s competitors raise their prices the marginal profitability of the firm s own price increase rises a similar structure is present in games of new technology adoption such as those of dybvig and spatt 1983 farrell and saloner 1986 and katz and shapiro 1986 when more users hook into a communication system or more manufacturers adopt an interface standard the marginal return to others of doing the same often rises similarly in some specifications of the bank runs model introduced by diamond and dybvig 1983 when more depositors withdraw their funds from a bank it is more worthwhile for other depositors to do the same in the warrant exercise

the advantage chain antecedents to rents from internal corporate ventures abstract in this article we argue that the resource based perspective on strategy offers a useful basis for understanding the contributions to the firm of corporate ventures the heart of the resource based view of the firm lies in arguments set forth by penrose and by nelson and winter penrose 1959 argued that differential mechanisms for resource combination and utilization result in heterogeneity among firms even among firms with similar factor endowments nelson and winter 1982 argued that behavior in particular behavior with respect to the utilization of firm resources becomes routinized over time people are often unable to describe or reconstruct well honed repetitive routines with ease van de ven 1986 consequently no two firms are likely to develop identical routines and it is often difficult for one firm to copy routines originated in another the idea that resources may be combined in routinized but relatively idiosyncratic ways suggests that firms will develop enduring differences in resource profiles and consequently in strategic potentialities over time consider the benefits a corporate venture can offer entering new markets making a new product developing a new technology or reconfiguring internal processes all require changes to existing resource configurations and routines these changes can allow the firm to discover ways of combining its resources and to the extent that the new combinations incorporate difficult to imitate routines it will take some time before that combination can be matched by competitors in other words venturing is one mechanism through which a firm gains superior insight about and access to firm specific resources with future rent potential value so a substantive and desirable outcome of venturing is the generation of valuable new resource combinations specific to the firm which it alone may exploit the article presents a model of those conditions that are necessary antecedents to streams of ricardian rent from the venture five such conditions are proposed all of which must be met if the firm is to derive rents from its venturing activities the first antecedent to securing rent streams from venturing is the emergence of causal understanding of the drivers of the venture s performance new causal understanding creates insight into new opportunity areas next team proficiency is essential to translate causal understanding into coordinated delivery of the product or service to the market new competences emerge as a result of evolving causal understanding and team proficiency which allow the organization to achieve new purposes from these new competences there may then develop distinctive competences that will differentiate the firm from competing organizations these distinctive competences may then become competitive advantages if they can be deployed in delivering product or service attributes that are preferred by the market to the offerings of competitors and competitors cannot readily duplicate them rents can only ensue when these inimitable competitive advantages allow a firm to achieve either distinctive efficiency in the firm or distinctive value for the customers the final section of the article offers ways in which this framework could be used first for research purposes and secondly by venture management

testing a causal model of corporate risk taking and performance the determinants of organizational risk taking and its impact on economic performance are critical issues in strategic management using a model that included risk performance performance expecta