Prerecorded session
Live session
Required readings
Camuffo, A., Gambardella, A. and Pignataro, A., 2023. Framing Strategic Decisions in the Digital World. Strategic Management Review, 4 (2), 127-160.
Camuffo, A., Gambardella, A. and Pignataro, A., 2024. Theory-Driven Strategic Management Decisions. CEPR DP 17664v3 link
Discussion questions
1 - The CEPR DP provides a framework for making strategic decisions under uncertainty based on causal logic moving from the choice of a state space (that is, a problem) and assumptions about the relations among attributes in the state space:
But where does the choice of the problem or assumptions come from? This is an inherent act of creativity – how and why can it be a source of competitive advantage?
2- An important limitation of the Bayesian logic is that it cannot update events that have zero probability – that is, events that agents are unaware of at the moment of the decision. Recent developments suggest that this can take place in two alternative ways:
Agents recognize that there could be states that they are not aware of and assign a probability that they occur. Then, if these events occur, they do not change the probability distribution across known and unknown states (Reverse Baysianism)
If agents observe events that they were not aware of, they change radically the entire state space and probabilities. When and why do we observe one vis-à-vis the other?
3- How can we test these theories (RCTs? Simulated experiments? Secondary data?)
Additional resources
Additional materials
Please also give a look at the following website: https://imsl.unibocconi.it where you can find
several simulations of famous strategic management decisions under uncertainty using the framework of the CEPR DP. You are welcome to play the simulations!
a non-technical video summarizing the CEPR DP
a technical video summarizing the CEPR DP
a video that shows how to play the simulations
Group members
Faculty advisors
Aliasghar Bahoo-Torodi aliasghar.bahoo-torodi@city.ac.uk
Participants
Jackson Anderson jaanderson@hbs.edu
Marleth Morales mmoralesmarenco@crimson.ua.edu
Shikha Khurana phd20shikhak@iima.ac.in