Learning to Fail in the Medical Device Industry

This study extends arguments on vicarious learning by exploring how effectively firms integrate indicators of others’ failures and successes. Our analyses of 356,992 adverse events in the medical device industry over a ten-year period (1997 to 2007) show that firms are more likely to learn from others’ failures when they have access to a greater abundance of indicators of failure because the larger sample affords stronger inferences about the causes and consequences of failures. Vicarious learning is hindered by delays - but less so for firms that actively integrate narrow domains of success and failure indicators