This article examines the causal effect of success and failure on future search behavior. Iteration based on frequent collection of market feedback has gained immense popularity as a method for innovation. Even as the literature has acknowledged this transformation, we have learned surprisingly little about how such feedback influences firms' search for innovation. This paper investigates firms' reaction to feedback using a unique data set consisting of 40,053 A/B tests (digital randomized controlled trials) conducted by 2,106 unique teams from 1,360 different firms. Using a sharp regression discontinuity around the 0.1 p-value (the default p-value for determining statistical significance in the particular software used to run the A/B tests), I compare experiments that had results just above or just below the 0.1 p-value. I demonstrate that failure causes teams to shrink their search, implementing fewer experiments and using fewer metrics to measure outcomes. Moreover, the difference between treatment and control is smaller in experiments following a failure, suggesting that the ideas implemented are relatively similar to the current version of their product.
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