Herd Behaviour as an Incentive Scheme
AbstractThis paper presents a model of technology invention in an emerging market. Managers wait and adopt the standard technology in the hope to free-ride on the effort level of another manager who may invent a superior technology. The more managers who adopt the standard technology, the more their successors believe that probably the superior technology doesn't exist. As this hampers the successors' incentives to innovate, herding in my model reduces the scope of strategic waiting.
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Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0425.
Date of creation: 01 Aug 2000
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- VERGARI, Cecilia, 2004. "Herd behaviour, strategic complementarities and technology adoption," CORE Discussion Papers 2004063, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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