When are decision makers able to learn from others? I argue that actors occupying network positions that enable social learning gain a competitive advantage. I show that the accuracy of security analysts' earnings forecasts improves when the coverage network readily conveys information about competitors' decision-making context. The benefits of social learning are most pronounced in unstable environments, measured by firms' forecast dispersion. Causality is established using a natural experiment: surviving analysts' network positions -along with their forecasting accuracy -deteriorated to the extent that their coverage overlapped with analysts who perished in the 9/11 attacks on the World Trade Center. The importance of social learning in the analyst profession goes well beyond improving forecasting accuracy. I show that analysts' clients recognize narrow expertise on those stocks where the analyst is ideally positioned for social learning. This article contributes to organizational theory by specifying network positions providing a superior view of competitors' information environment and to strategy research by identifying conditions under which these positions confer a competitive advantage.
| Identifer | oai:union.ndltd.org:columbia.edu/oai:academiccommons.columbia.edu:10.7916/D8MS3RQ6 |
| Date | January 2015 |
| Creators | Uribe, Jose Nicolas |
| Source Sets | Columbia University |
| Language | English |
| Detected Language | English |
| Type | Theses |
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