Innovation as a social bubble: The example of the Human Genome Project
In this paper we present a detailed synthesis of the development of the Human Genome Project (HGP) from the mid 1980s through 2000, in order to test our hypothesis of “social bubbles”, which claims that strong social interactions between enthusiastic supporters weave a network of reinforcing feedbacks that lead to widespread endorsement and extraordinary commitment by those involved, beyond what would be rationalized by a standard cost-benefit analysis in the presence of extraordinary uncertainties and risks. The HGP was initiated as a public project funded by government agencies, starting at a moderate pace. The progressive introduction of different actors and the development of various interests catalyzed the project, which eventually became eminent both in the public and private sectors. The competition between the public and the private sector played greatly in favor of both: the financial burden as well as the horizon of the public project were significantly reduced, the private project(s) gained from the hype of the public project, yet had to play an active and collaborative role in order to remain in the game. This is at the core of the social bubble hypothesis. To further our argument, we present quantitative analysis of the development of the biotech sector within the financial stock market. Lastly, we point to the fact that the hypes fueling the bubble during its growth have not been followed by real tangible outcomes over the short expected time horizons. Indeed, at the time of writing (May, 2011), the consensus of the scientific community is that it will take decades to exploit the fruits of the HGP.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carlota Perez, 2009. "The double bubble at the turn of the century: technological roots and structural implications," Cambridge Journal of Economics, Oxford University Press, vol. 33(4), pages 779-805, July.
- Shobita Parthasarathy, 2007. "Building Genetic Medicine: Breast Cancer, Technology, and the Comparative Politics of Health Care," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262162423, December.
- Monika GISLER & Didier SORNETTE, 2010. "Bubbles Everywhere in Human Affairs," Swiss Finance Institute Research Paper Series 10-16, Swiss Finance Institute.
- Anders Johansen & Didier Sornette, 2000. "The Nasdaq crash of April 2000: Yet another example of log-periodicity in a speculative bubble ending in a crash," Papers cond-mat/0004263, arXiv.org, revised May 2000.
- Engle, Robert F & Granger, Clive W J, 1987.
"Co-integration and Error Correction: Representation, Estimation, and Testing,"
Econometric Society, vol. 55(2), pages 251-76, March.
- Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
- Anders Johansen & Didier Sornette, 2010. "Shocks, Crashes and Bubbles in Financial Markets," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 53(2), pages 201-253.
- Zhou, Wei-Xing & Sornette, Didier, 2005. "Testing the stability of the 2000 US stock market “antibubble”," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 348(C), pages 428-452.
- D. Sornette & A. Johansen, 2001. "Significance of log-periodic precursors to financial crashes," Quantitative Finance, Taylor & Francis Journals, vol. 1(4), pages 452-471.
- D. Sornette & A. Johansen, 2001. "Significance of log-periodic precursors to financial crashes," Papers cond-mat/0106520, arXiv.org.
- Jiang, Zhi-Qiang & Zhou, Wei-Xing & Sornette, Didier & Woodard, Ryan & Bastiaensen, Ken & Cauwels, Peter, 2010. "Bubble diagnosis and prediction of the 2005-2007 and 2008-2009 Chinese stock market bubbles," Journal of Economic Behavior & Organization, Elsevier, vol. 74(3), pages 149-162, June.
- Sornette, Didier & Zhou, Wei-Xing, 2006. "Predictability of large future changes in major financial indices," International Journal of Forecasting, Elsevier, vol. 22(1), pages 153-168.
- D. Sornette, 2008. "Nurturing breakthroughs: lessons from complexity theory," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 3(2), pages 165-181, December.
When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:40:y:2011:i:10:p:1412-1425. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.