Events

Ms. Nety Wu
Ph.D. Candidate in Strategy
INSEAD

Experimentation costs have long constrained search. As those costs fall, searchers can run more trials, iterate faster, and generate more feedback, raising the possibility that experimentation can substitute for theory. What role remains for theory as experimentation becomes less costly? Of the ways theory can shape search, I focus on two: informing where promising solutions are likely to lie and what level of performance may be sufficient to stop. In a preregistered experiment with 1,440 participants searching rugged payoff landscapes, I independently varied trial cost, an externally supplied prior, and a displayed peer benchmark. I find that lower cost narrows the prior’s advantage in average best fitness because participants without it improve through additional trials. The prior nevertheless continues to localize search and shape discovery at both cost levels: prior holders search more locally, remain closer to the recommended region, and discover systematically different solutions. I find no evidence that trial cost changes the benchmark’s effect on total search. Exploratory analyses suggest that stopping rises as performance approaches the displayed benchmark, with a weaker association under low cost. These findings suggest that falling trial costs change the role of theory selectively: lower-cost experimentation narrows the performance advantage of prior direction while the prior continues to organize where search occurs and which solutions are discovered.