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dc.contributor.authorGarfagnini, Umbertoen_US
dc.contributor.authorStrulovici, Brunoen_US
dc.date.accessioned2012-02-14en_US
dc.date.accessioned2012-07-12T12:34:21Z-
dc.date.available2012-07-12T12:34:21Z-
dc.date.issued2012en_US
dc.identifier.urihttp://hdl.handle.net/10419/59678-
dc.description.abstractWe study social learning and innovation in an overlapping generations model, emphasizing the trade-off between marginal innovation (combining existing technologies) and radical innovation (breaking new ground). We characterize both short-term and long-term dynamics of innovation, and the intergenerational accumulation of knowledge. Innovation cycles emerge endogenously, but the number of cycles is finite almost surely, and radical innovation terminates in finite time. We identify a negative relationship between past successes and the magnitude of radical innovation, combining insights from the multi-armed bandit literature with a spatial representation of innovation. Past successes reduce the incremental value of experimentation, and result in less ambitious innovation. In our framework, patents promote radical innovation through two channels: by increasing the expected benefit of radical innovation and by increasing the cost of marginal innovation. Our analysis suggests that sustaining radical innovation in the long-run requires external intervention.en_US
dc.language.isoengen_US
dc.publisherNorthwestern Univ., Kellogg Graduate School of Management, Center for Mathematical Studies in Economics and Management Science Evanstonen_US
dc.relation.ispartofseriesDiscussion Paper, Center for Mathematical Studies in Economics and Management Science 1546en_US
dc.subject.jelD83en_US
dc.subject.jelO3en_US
dc.subject.ddc330en_US
dc.subject.keywordSocial Learningen_US
dc.subject.keywordInnovationen_US
dc.subject.keywordTechnological Changeen_US
dc.subject.keywordExperimentationen_US
dc.titleSocial learning and innovation cyclesen_US
dc.typeWorking Paperen_US
dc.identifier.ppn685269213en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Discussion Papers, Kellogg School of Management, Northwestern University

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