Biyalogorsky Wins Prestigious American Marketing Association Award
Associate Professor Eyal Biyalogorsky and his co-authors, Professors William Boulding and Richard Staelin, both of Duke University’s Fuqua School of Business, received the 2006 Harold M. Maynard Award for their article, “Stuck in the Past: Why Managers Persists with New Product Failures,” published in the April 2006 issue of the Journal of Marketing. The journal’s Editorial Review Board selects the best article in a given year for its greatest contribution to marketing theory and thought. In this award-winning article, Biyalogorsky and his co-authors investigate the phenomenon of escalation bias in the context of managing new product introductions. Marketing managers are often asked to make major decisions, even though the information available to them at the time of the decision is incomplete and uncertain. The main finding of Biyalogorsky and his co-authors reveals that the involvement with an initial decision a key construct in extant explanations for escalation behavior (e.g., agency theory, self-justification) is not a necessary condition to induce commitment to a losing course of action (i.e., escalation bias). Rather, an improper use of initial positive beliefs in the face of negative new information drives the escalation bias. This insight has implications for managers to avoid the trap of escalation bias often associated with major strategic decisions. Biyalogorsky, Boulding and Staelin were honored with the Maynard Award, which carries both a plaque and a cash prize, at the American Marketing Association’s 2007 Winter Marketing Educators’ Conference in February.