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A Theory of Visionary Disruption

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  • Joshua S. Gans

Abstract

Exploitation of disruptive technologies often requires resource deployment that creates conflict if there are divergent beliefs regarding the efficacy of a new technology. This arises when a visionary agent has more optimistic beliefs about a technological opportunity. Exploration in the form of experiments can be persuasive when beliefs differ by mitigating disagreement and its costs. This paper examines experimental choice when experiments need to persuade as well as inform. It is shown that, due to resource constraints, persuasion factors more highly for entrepreneurial than incumbent firms. However, incumbent firms, despite being able to redeploy resources using authority, are constrained in adoption as exploration cannot mitigate the costs of disagreement

Suggested Citation

  • Joshua S. Gans, 2022. "A Theory of Visionary Disruption," NBER Working Papers 30091, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30091
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    File URL: http://www.nber.org/papers/w30091.pdf
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    Cited by:

    1. Ajay Agrawal & Joshua S. Gans & Avi Goldfarb, 2023. "Similarities and Differences in the Adoption of General Purpose Technologies," NBER Chapters, in: Technology, Productivity, and Economic Growth, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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