European Management Review zyxwvuts (2007) 4, zyxwvuts 173- zyxwvutsr 181 zyxwvutsrq 0 2007 EURAM Palgrave Macmillan Ltd. All rights reserved 1740-4754/07 $30.00 palgrave-joumals.com/ernr Using experiments in corporate strategy research Rachel Croson’ , Jaideep Anand2, Rajshree Agatwa13 ’EPPS and SOM, University of Texas, Dallas, Richardson, TX, USA ‘Fisher College of Business, Ohio State University, Columbus, zyxwvutsr OH, USA 3College of Business Administration, University of Illinois at Urbana Champaign, Champaign, IL 61820, USA Correspondence: Rachel Croson, EPPS and SOM, University of Texas, Dallas, Richardson, TX 75080-3021, USA. Tel: + 1 972 883-6016 Fax: + 1 972 zyxwvutsrqp 883-6486; E-mail: crosonr@utdallas.edu Abstract Research in corporate strategy has come a long way since its early days as a purely case-based investigation.Today, corporate strategy theory draws not only on ideas from many disciplines, but has also developed its own concepts to better describe and predict strategic behavior. Methodologically, however, modern corporate strategy research relies primarily on observationalmethods using large data sets, developed either from primary or archival sources. We argue for an increased use of experiments to address the current integrative and interdisciplinary theory in corporate strategy and to complement existing methods. We review the few experiments in corporate strategy research, and describe the advantages and limitations of the experimental method. European Management Review (2007) 4, 173-1 81. doi:l0.1057/palgrave.emr.l500082 Keywords: zyxwvutsrqpo experiment; strategy; methodology Introduction esearch in corporate strategy began with a case-based approach in the 1960s and 1970s (Chandler, 1962, R 1977; Learned zyxwvutsrq et zyxwvutsrqp al., 1969; Allison, 1971; Bowman, 1974), but it has evolved significantly since then. As a response to the recommendation of two influential ‘foundation reports’ (Gordon and Howell, 1959; Pierson, 1959), management scholars turned to related disciplines such as economics, psychology, and sociology for increased academic rigor (Agarwal and Hoetker, 2007). As a result, corporate strategy is now an inherently interdisciplinary endeavor, and has benefited, particularly on the theoretical front from the application of relevant concepts from related disciplines on issues of how corporations make, implement and benefit from strategic decisions. On the methodological front, however, current research relies chiefly on the use of observational (empirical) data, developed either from archival or primary sources, in spite of the fact that the development, testing, and expansion of the relevant theories in related disciplines often rely on a multitude of research methodologies. As an example, game theoretic models in economics are often tested using experimental methodologies (e.g., Kagel and Roth, 1994). While corporate strategy research has benefited significantly from game theoretic insights (e.g., Camerer, 1991; Saloner, 1991; Khanna et al., 1998), the concomitant experimental methodology has not made inroads in strategy research. In this paper, we suggest that corporate strategy would benefit from an expansion of its current set of research methodologies. In particular, we discuss the advantages and limitations of experimental methods in addressing core strategy theories and as a complement to current observa- tional approaches. We provide some illustrative examples of how a few studies have successfully implemented experimental methodology in corporate strategy research, and also call attention to additional areas that may benefit from its application. This article thus is aimed at corporate strategy researchers who might be unfamiliar with experi- mental methods, but are interested in expanding their tool kit of research methodologies. We define an experiment as a research methodology which involves collecting primary data from individual decision-makers who face real payoffs from their responses. Experiments can involve either individual decision-making or interactive (game-theoretic) tasks. Most importantly, experiments involve multiple treatments, that is, some participants see one set of materials, and other participants see another set (in a between-subject design) or all parti- cipants see multiple materials (in a within-subject design). The behavior of the participants is compared between the