Fig. 4

Risk of being outdated: Probabilities of the four strategies under ambiguity. \(PC\), \(PB\), \(PL\), and \(PG\) represent the probabilities of pursuing compulsive, buy-and-hold, leapfrog, and laggard strategies, respectively. To obtain conservative results, we choose a low level of ambiguity (\(c=0.4\)) as managers’ perceived ambiguity. Panels A and B show the innovation strategies for varying \({\mathbb{E}}(T)\) and for varying \(\mu\), respectively. Compared with no risk of being outdated (left graphs), the risk of being outdated increases \(PC\) and \(PB\) (right graphs)