Mental representation and the discovery of new strategies

Paper highlights

Strategic search occurs in two places at once. Managers search among possible actions, but they also search among ways of representing the problem. A firm that changes its mental model can see alternatives that were invisible under the old one, even if its underlying capabilities have not changed.

This paper shows why the two searches must be managed together. With little time, changing the representation can be costly because the firm has too little time left to find good policies within the new view. Over longer horizons, balancing search over representations and policies improves expected performance and reduces variation across search attempts.

How the model works

The formal model separates the real performance landscape from the simplified landscape a manager perceives. Managers can either search for better policies within their current representation or change which dimensions they use to understand the environment. The analysis varies the time available, the accuracy of the representation, and how unevenly the true drivers of performance matter.

Main results

• A change in representation can free a firm from a local peak, but the move pays only when enough time remains to search again.
• More accurate representations are not always more useful. A highly detailed representation can be difficult to search, particularly when it includes dimensions that matter little.
• Over longer searches, balancing the two search modes both raises average performance and reduces dependence on the firm’s starting point.

Why it matters

• Strategic search includes both searching for actions and searching for a better representation of the problem.
• Reframing can reveal distant alternatives, but it also discards learning accumulated under the old frame; its value depends on the time left to search.
• A simpler representation can outperform a more faithful one when it focuses attention on influential dimensions and makes search tractable.

How to use this paper

Cite this for

• A formal model of dual search over strategies and mental representations.
• The idea that changing a representation changes which strategic alternatives are visible.
• Conditions under which a more accurate or detailed representation can lower performance.

Useful for teaching

• Reframing as a search move with an opportunity cost, not only a creativity exercise.
• Why managers may need to balance improving the model of the problem with searching within the current model.
• How local peaks can come from the representation used to evaluate alternatives.

Careful claim

Changing a representation can improve strategic search when enough time remains to learn within the new frame; more faithful representations are not always better because they can make search harder.

Abstract

Managers’ mental representations affect the perceived payoffs and alternatives that managers consider. Thus, mental representations affect how managers search for profitable strategies as well as the quality of strategies they discover. To study how mental representation and search interact, we formally model the dual search over possible representations and over policy choices of a strategy ‘landscape.’ We analyze when it is preferable to emphasize searching for the best policies rather than the best mental representation, and vice versa. We show that in the long run a balance between the two search modes not only results in better expected performance but also reduces the variation in performance. Additionally, the paper describes conditions under which increased accuracy of mental representations can actually worsen firm performance.

Other links

• SSRN preprint

Last updated 2026-06-21