Understanding the exploration–exploitation dilemma: An fMRI study of attention control and decision‐making performance

Abstract

This paper studies the cognitive processes that enable decision makers to switch between exploitation and exploration. We use functional magnetic resonance imaging (fMRI) in a sample of expert decision makers to make two main contributions. First, we identify and contrast the specific brain regions and cognitive processes associated with exploitation and exploration decisions. Exploitation activates regions associated with reward seeking, which track and evaluate the value of current choices, while exploration relies on regions associated with attentional control, tracking the value of alternative choices. Second, we propose and test the idea that stronger activation of the brain circuits related to attentional control allows individuals to achieve better decision‐making performance as a result. We discuss the implications of these results for strategic management research and practice. Copyright © 2013 John Wiley & Sons, Ltd

The Relationship between Human Resource Management Ambidexterity and Talent Management: The Moderating Role of Electronic Human Resource Management

“…Therefore, it has attracted researchers' attention along few past periods. Additionally, there is a general agreement between researchers about achieving OA by simultaneously pursuing exploration and exploitation of resources because they are critical to long-term organizational success (Veider & Matzler, 2015;Choi & Lee, 2015;Wei, Zhao & Zhang., 2014;Laureiro-Martı´nez, Brusoni, Canessa & Zollo, 2014). However, drawing on literature review, there are conflicting views concerning how to achieve the trade-off between exploitation and exploration to support OA.…”

Neuroeconomics

“…Activity in this region, particularly in the right hemisphere, tracks the value of alternative choices and predicts effective switching between exploitation and exploration (Boorman et al, 2009). Supporting evidence comes also from a recent study comparing brain activity of matched groups of entrepreneurs (i.e., people managing the organization they founded based on their venture idea) and managers (involved in making strategic decisions but with no venture experience) engaged in the four-armed bandit task (Laureiro-Martinez et al, 2014a). Compared with managers, entrepreneurs showed higher decision-making efficiency (i.e., comparable payoff in shorter time), related to stronger activity in the same sector of the right FPC described by Boorman et al (2009) (Figure 2-bottom), a finding that may be compatible with specific experience or with biological predispositions (see also Coates et al, 2009).…”

“…At the neural level, the choice between exploiting current knowledge, and exploring in order to collect new one, involves a trade-off in the activity of two brain networks. While abundant evidence supports the role of the dopaminergic frontostriatal system in learning to exploit (Beeler et al, 2010), explorative decisions engage the IPS and frontopolar cortex (FPC) (Daw et al, 2006;Laureiro-Martinez et al, 2014a, 2014b; see Figure 2 -top). Recent studies show that also the ability to timely switch between exploitation and exploration is subject to individual differences, involving the FPC.…”

Strategic management: Building depth as well as breadth

“…As we look deeper into human behavior we will start to look more to psychology and potentially even further to neuroscience to help us make a closer connection to what happens in our brain when making different kinds of decisions (Laureiro-Martínez, Brusoni, Canessa, & Zollo, 2014). More micro-oriented business research such as that considering corporate psychopaths is already looking toward and utilizing the neuroscience that has been undertaken in the study of psychopathy.…”