The value and direction of innovation

Kangoh Lee ()
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Kangoh Lee: San Diego State University

Journal of Economics, 2020, vol. 130, issue 2, No 2, 133-156

Abstract: Abstract This paper considers the allocation of innovators between two research lines that differ in their values of innovation and their probabilities of discovery. Innovators choose a research line to maximize their expected utility, and the high value research line may attract more or fewer innovators than the low value research line, depending on the difficulty of discovery. The equilibrium allocation is not efficient, as innovators ignore the effects of their choice of research lines on other innovators.

Keywords: Probability of discovery; Value of innovation; Direction of innovation; Efficiency (search for similar items in EconPapers)
JEL-codes: O32 O33 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:130:y:2020:i:2:d:10.1007_s00712-020-00691-y

DOI: 10.1007/s00712-020-00691-y

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