Championing the flawed gems: in search of contrarian opportunities through minority ruling
File(s)
Accepted version
Author(s)
Arrieta, Jose Pablo
Liu, Chengwei
Type
Journal Article
Abstract
Effective decision-making structures like majority voting reduce noise, but they can also result in organizations competing for the same high-quality targets, diluting profits. We examine minority ruling, which champions the minority’s choices and denies the majority’s, as an unconventional approach to finding overlooked opportunities. Inspired by a venture capital firm that used minority ruling to identify nanotechnology startups, we computationally demonstrate its ability to maximize noise impact and identify signals for contrarian opportunities. The wisdom of minority ruling lies in how it monopolizes the “flawed gems” hidden from competition-neglecting rivals. Our findings contribute to the literature on decision structures by incorporating competition dynamics and illuminate a behavioral strategy that underdogs can use to profit from incumbents’ blind spots.
Keywords: minority ruling, information-aggregation structure, behavioral strategy, organizational learning, competition neglect
Keywords: minority ruling, information-aggregation structure, behavioral strategy, organizational learning, competition neglect
Date Issued
2024-08
Date Acceptance
2024-07-09
Citation
Academy of Management Proceedings, 2024 (1)
ISSN
2151-6561
Publisher
Academy of Management
Journal / Book Title
Academy of Management Proceedings
Volume
2024
Issue
1
Copyright Statement
Copyright © 2024 Copyright Owner. This is the author’s accepted manuscript made available under a CC-BY licence in accordance with Imperial’s Research Publications Open Access policy (www.imperial.ac.uk/oa-policy)
License URL
Publication Status
Accepted
Article Number
10581