“Does co-opetition change the game? A Bayesian analysis of firm participation strategy in an industry standard-setting organization,” 43rd Hawaii International Conference on Systems Science (HICSS), Kauai, HI, January 2010

1. Does Co-opetition Change the Game? A Bayesian
Co-
Analysis of Firm Participation Strategy in an
Industry Standard-Setting Organization
Standard-
Juliana Tsai
with Rob Kauffman and Ben Shao
W. P. Carey School of Business
Arizona State University
Copyright © 2010 by J. Y. Tsai

2. Strategic Information Updating

3. “It is a capital mistake to theorize
before one has data. Insensibly one
begins to twist facts to suit theories,
instead of theories to suit facts.”
– Arthur Conan Doyle (1859-1930),
A Scandal in Bohemia

4. Research Questions
• How does the relationship between firm
characteristics and SSO entry timing change as
strategic information updating occurs?
• What theoretical perspectives enable us to
explain a firm’s strategic timing of entry?
• What additional knowledge can be obtained by
using a process focused analysis method such
as the Bayesian survival analysis?

5. Strategic Information Signaling
Transmission
Sender transmits a signal to One party (the agent) credibly
receiver who then takes action conveys some information about
that determines the welfare of itself to another party (Spence
both (Crawford and Sobel 1982). 1973).
Cheap Talk Social Learning
Communication that does not Economic agents base decisions
directly affect payoffs (Farrell on the experience of others
and Rabin 1996). (Ellison and Fudenberg 1993).
Information Cascades Rational Herd Behavior
Individuals ignore their own Individuals follow the behavior
private information to follow the of others with the underlined
actions of those ahead of them assumption that everyone else is
(Bikhchandani et al. 1992). rational (Banerjee 1992).

7. Variables
VARIABLE DEFINITION
Dependent variable
AgeSSO Age of the SSO when a firm joined (in years)
Independent variables
lnFirmAge Natural logarithm of the age of the firm in years;
proxy for management experience
R&DIntensity 1 if firm’s annual R&D spending (in millions) is
greater than zero, 0 otherwise
NetIncome 1 if net income (in millions) is positive, 0
otherwise; proxy for organizational slack
lnEmpEfficiency Natural logarithm of revenue (in millions) /
number of employees (in thousands)

8. Coefficient Estimate
• Results for 20 year period (1988-1997)
• 95% posterior distribution of
Evidence of signaling coefficient estimate
• Data unavailable for years 3, 4, 5, & 6
Evidence of strategic
information transmission
Year

9. Coefficient Estimate
Evidence of rational
herd behavior
Year

10. Coefficient Estimate
Evidence of information
cascades and social learning
Year

11. Coefficient Estimate
Evidence of rational
herd behavior
Year

12. What do we learn from the data?
• Evidence of strategic information updating
is observed over time
• Theories reflect the changing effects
• Uncertainty is diminished as shown by the
stabilization effects
• An overall consistency in our observations