The Novelty of Innovation: Competition, Disruption, and Antitrust Policy
研究了创新新颖性对市场竞争和创新质量的影响，发现新进入者比在位者更倾向于大胆创新，但被收购前景会抑制新颖性，从而支持严格的反垄断政策。
We develop a model to capture the novelty of innovation and explore what it means for the nature of market competition and quality of innovations. An innovator decides not only whether to innovate but how boldly to innovate, where the more novel is the innovation—the more different it is from what has come before—the more uncertain is the outcome. We show in this environment that a variant of the Arrow replacement effect holds in that new entrants pursue more innovative technologies than do incumbents. Despite this, we show that the new entrant is less likely to disrupt an incumbent than the incumbent is to disrupt itself, and less likely to fail in the market. We extend the model to allow the incumbent to acquire the entrant postinnovation and show that this reverses the Arrow effect. The prospect of acquisition makes innovation more profitable but simultaneously suppresses the novelty of innovation as the entrant seeks to maximize her value to the incumbent. This reversal suggests a positive role for a strict antitrust policy that spurs entrepreneurial firms to innovate boldly. This paper was accepted by Joshua Gans, business strategy.