Fig. 6

Volatility impacts: Probabilities of the four strategies under ambiguity when the volatility of the state of innovation, \(\sigma\), varies. \(PC\), \(PB\), \(PL\), and \(PG\) represent the probabilities of pursuing compulsive, buy-and-hold, leapfrog, and laggard strategies, respectively. Parameter \(c\) represents the degree of ambiguity perceived by managers. When \(c=0.5\), ambiguity is absent, implying that managers are neutral toward ambiguity. As \(c\) decreases, the degree of ambiguity increases. The case \(c=0.2\) represents the highest degree of ambiguity that managers perceive. When there is no ambiguity or the degree of ambiguity is low, \(PL\) and \(PG\) increase, but \(PB\) and \(PC\) decrease as the volatility of the state of innovation increases. When the degree of ambiguity is modest or high, the four probabilities remain constant beyond a certain level of \(\sigma\)