Flops and missed opportunities: Three empirical studies on adverse decision outcomes in innovation-related contexts

Thumbnail Image

Files

HofmannBjoern-2026-07-08.pdf (1.43 MB)

Date

2026

Authors

Advisors/Reviewers

Further Contributors

Contributing Institutions

Publisher

Journal Title

Journal ISSN

Volume Title

Publisher

License

In Copyright
In Copyright

Quotable link

DOI:
https://doi.org/10.22029/jlupub-21290

Abstract

This doctoral thesis examines determinants and consequences of specific adverse decision outcomes in high-stakes, innovation-related contexts through three empirical studies. The first study investigates why decision-makers sometimes do not pursue eventually successful innovations further and, thus, commit a costly abandonment error. Drawing on the exploitation-exploration paradigm, uncertainty theory, and dual information processing, we elaborate a stepwise process model of abandonment error occurrence at the project level. Testing the model with survey data from 149 managers, the results show that the type of innovation project is associated with the level of uncertainty decision-makers perceive. Those perceptions of uncertainty shape how decision-makers cognitively approach project evaluation and decision-making, thereby affecting decision quality and, by extension, the likelihood of abandoning an eventually successful innovation. Overall, the study contributes to the nascent research on abandonment errors and the literature on decision-making in innovation projects. Drawing on the theory of risk-type preference shifts, the second study investigates how recent yet distinct failures, i.e., commission errors (innovation flops) and omission errors (missed opportunities), dynamically influence managers’ persistence with currently underperforming innovation projects. Using a metric conjoint experiment encompassing 1,424 decisions by 89 managerial decision-makers, the study demonstrates that a recent commission error is associated with a lower likelihood of persistence than a recent omission error. In addition, the findings reveal that decision-maker heterogeneity, i.e., differences in self-regulatory ability (action versus state orientation) and cognitive style (extent of rational thinking), further shapes persistence decisions. The study contributes to research on persistence, particularly in the context of innovation development, and the theory of risk-type preference shifts. The third study examines how and when missing out on leveraging a desirable strategic investment opportunity influences subsequent firm behavior. Focusing on corporate acquisitions, which share many characteristics with innovation investments, the study analyzes a global dataset of 446 acquisition announcements in competitive bidding situations from 2000 to 2022. Drawing on the behavioral theory of the firm and related research on behavioral decision-making, the study reveals that bidders who miss out on acquiring their desired targets tend to spend more on subsequent acquisitions than those who complete respective deals. External evaluations, as reflected in stock market reactions to completion and abandonment announcements, further influence this behavioral mechanism. The findings illuminate how missing out on leveraging a desirable opportunity shapes subsequent organizational investment behavior in high-stakes decision contexts. Overall, the three studies of this doctoral thesis contribute to theory, prior literature, and practice by providing unique insights into the determinants (first study) and subsequent behavioral consequences (second study and third study) of specific adverse decision outcomes. While the first study advances the understanding of project-specific and cognitive antecedents of premature abandonment, the other two studies illuminate the behavioral implications of distinct types of failure for individual and organizational decision-making.

Link to publications or other datasets

Description

Notes

Original publication in

Original publication in

Anthology

Collections

Dissertationen/Habilitationen

URI of original publication

Forschungsdaten

Series

Citation