Behavioral Microfoundations of New Practice Adoption: The Effects of Rewards, Training and Population Dynamics

Antoine Feylessoufi (), Stylianos Kavadias () and Daniel Ralph ()
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Antoine Feylessoufi: Judge Business School, University of Cambridge, Cambridge CB2 1AG, United Kingdom School of Management, University College London, London E14 5AA, United Kingdom
Stylianos Kavadias: Judge Business School, University of Cambridge, Cambridge CB2 1AG, United Kingdom
Daniel Ralph: Judge Business School, University of Cambridge, Cambridge CB2 1AG, United Kingdom

Management Science, 2024, vol. 70, issue 10, 6685-6703

Abstract: Organizations face challenges when trying to effectively introduce new operational practices that substitute for existing ones. We study how the dynamics due to social comparisons between employees give rise to individual strategic considerations and eventually shape the organizational adoption outcome. We develop an evolutionary game theory model that accounts for these microlevel individual adoption decisions and their impact on macrolevel population adoption equilibria. Social comparisons invoke dynamics that expand the possible outcomes beyond the traditional nonadoption versus full-adoption dichotomy. Specifically, ahead-seeking social comparisons drive the long-term coexistence of practices because employees seek to differentiate their choices from those of others. Meanwhile, behind-averse comparisons create a bandwagon effect that determines adoption depending on the initial fraction of adopters—that is, employees who are trained upfront. These dynamics are robust to various settings: different conceptualizations of social comparisons, each employee responding to more than one kind of social comparison, and nonhomogeneous social comparisons across employees. Moreover, they are material to organizations that seek to maximize their profit when introducing a new practice, by setting the levels of upfront training and adoption rewards. Our results call for senior managers to account for such behavioral traits when managing the introduction of new practices. Profitable adoption critically relies upon matching rewards and training to the type of social comparison.

Keywords: adoption processes; social comparisons; population dynamics; evolutionary game theory (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:70:y:2024:i:10:p:6685-6703

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