On-chain data

A rich literature underscores the behavioral theory of the firm. A core concept of this literature concerns performance feedback, the term linking managerial behavioral responses to the performance which guides subsequent firm action. We highlight an implicit feature of the literature, namely that empirical research typically observes performance feedback through the annual windows of archival reporting. We relax this assumption and document the aspiration-feedback relationship by estimating the same model at 1-, 3-, 7-, 30-, 90-, and 365-day windows. To that end, we take advantage of the context of Bitcoin miners, integrating detailed data for publicly traded miners with daily BTC inflows, market data, and blockchain network data. This is a setting where (i) mining for Bitcoin represents a highly uncertain action, and (ii) performance feedback does not require years or quarters to feed back, and often materializes instantaneously. We document substantial differences across windows. Social aspiration effects are negative at short windows and become weaker or positive at longer horizons. Historical aspiration effects are salient mostly at intermediate windows. The main contribution of our findings is to document that estimates of the aspiration-feedback relationship depend substantially on the temporal window over which feedback and response are observed. A secondary contribution is to our understanding of the Bitcoin setting: we discuss how annual estimates may confound operational adjustment, managerial attention, and capacity adaptation, and suggest how departure from annual to monthly-to-quarterly windows may be most aligned with the canonical assumptions of the behavioral theory of the firm.

Paper available upon request.