Challenging Traditions: Embracing Need-Solution Pairs and Conventional Signaling in the Digital Economy

Christian Holthaus

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: Innovation is often seen as the essential component of progress, transforming visionary ideas into tangible realities that revolutionize markets and societies. Thus, the journey of innovation begins with idea generation and typically ends with commercialization, that is, distribution, marketing and sales activities. This dissertation challenges two long-lasting paradigms of these crucial phases in the innovation process. Traditionally, idea generation has followed the need-first paradigm, where inventors identify a market need and then develop solutions. Similarly, the commercialization phase, where products or services are put to market, has been dominated by assessment signaling, which emphasizes verifiable, costly information to be beneficial for sales success, such as online customer reviews or certifications. However, recent research has introduced two new paradigms challenging these traditional views: need-solution pair (NSP) discovery and conventional signaling. The NSP approach revolutionizes idea generation by allowing for the simultaneous discovery of a need and its solution, bypassing the traditional problem formulation phase. The first study presented in this dissertation investigates this process by examining how everyday individuals recognize solutions through their perception and functional understanding of objects, often without prior problem formulation. The study finds that NSPs are the predominant problem-solving method in everyday innovation and, most importantly, that such innovations outperform classical need-first solutions in terms of creativity and novelty with no difference in general (use) value. Moreover, the study finds that NSP discovery is more frequent when con-straints on functional reasoning are reduced, that is, there is no specific instruction imposed. This finding highlights that individuals can be highly innovative through spontaneous every-day object recognition, even more so when they have no specific goal in mind. The conventional signaling paradigm in the commercialization phase focuses on unstructured, unverifiable forms of communication, such as narrative self-descriptions, which are increasing-ly available in online labor markets (OLMs). Study 2 examines how conventional signals sent in service sales situations affect sales revenue and clients' willingness to buy. The study reveals that self-promotion is a strong predictor of sales revenue, while the effectiveness of ingratiation depends on context. Although ingratiation alone may have negative effects, it enhances willingness to buy when combined with self-promotion, especially when performance ratings are imperfect. This study underscores both, the relative strength of conventional signals and the importance of balancing conventional and assessment signals to maximize competitive advantage. Overall, this dissertation challenges traditional paradigms of idea generation and commerciali-zation, proposing that both need-solution pair recognition and conventional signaling offer valuable insights into contemporary practices. It contributes to research on innovation management by advancing our understanding of the crucial phases of innovation—idea generation and commercialization, redefining signaling and problem-solving theory through a cognitive mechanism perspective, and showing new methods to make these phenomena measurable. The findings have significant implications for research and practice, particularly in innovation management and digital platforms.

Date: 2025-07-08
Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/155734/
References: Add references at CitEc
Citations:

Downloads: (external link)
https://tuprints.ulb.tu-darmstadt.de/30236

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:155734

Access Statistics for this paper

More papers in Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL) Contact information at EDIRC.
Bibliographic data for series maintained by Dekanatssekretariat ().