Packet: Winners Curse ``Managerial Conservatism and Rational Information Acquisition, '' Journal of Economics and Management Strategy (Spring 1992), 1(1): 175-202. Conservative managerial behavior can be rational and profit- maximizing. If the valuation of innovations contains white noise and the status quo would be preferred to random innovation, then any innovation that does not appear to be substantially better than the status quo should be rejected. The more successful the firm, the higher the threshold for accepting innovation should be, and the greater the conservative bias. Other things equal, more successful firms will spend less on research, adopt fewer innovations, and be less likely to advance the industry 's best practice. In Ascii txt-Latex (76K) or pdf ( http://rasmusen.org/published/Rasmusen_92JEMS.conservatism.pdf).Ascii txt-Latexpdf ( http://rasmusen.org/published/Rasmusen_92JEMS.conservatism.pdf). 3
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