Managers can reap benefits by understanding the role of luck in performance and exploit how rivals mistake luck for skill, according to an Academy of Management Review article.

“Our theory is about searching for opportunities from rivals’ mistakes. Decision biases create opportunities for you if you can exploit others’ under- or overestimation of strategic resources as a result of their biases,” said Chengwei Liu of ESMT Berlin and University of Warwick.

In their article, “In Search of Behavioral Opportunities From Misattributions of Luck,” Liu and coauthors Jerker Denrell of University of Warwick and Christina Fang of New York University “focus on one ubiquitous bias—misattributions of luck in performance evaluation—and elaborate how the resulting errors can be translated into strategic opportunities.”

Read more at AOM Insights