Daniel P. Gross

Assistant Professor of Business Administration

Daniel P. Gross is an assistant professor of business administration in the Strategy Unit. He was previously a postdoctoral fellow at Harvard Business School and the National Bureau of Economic Research.

Professor Gross studies topics in the economics of innovation, with a research program focused on technological innovation and the management of creative workers within organizations. In recent work, he has studied the effects of competition on individuals' creative production, the drivers of technology diffusion, and the impacts of technology standards on economic activity. A common theme throughout Professor Gross' work is how competition shapes strategic choices in innovation, and the resulting implications for firms, consumers, and policymakers. His research has been featured in The New York Times.

Professor Gross received his PhD in economics from the University of California, Berkeley, where he was a graduate fellow of the National Science Foundation, the University of California, and the Economic History Association, and where he won awards for his research and teaching. Prior to graduate school, he worked in policy research, management consulting, and at a high-growth startup that went on to achieve a successful exit.

Journal Articles

  1. Performance Feedback in Competitive Product Development

    Daniel P. Gross

    Performance feedback is ubiquitous in competitive settings where new products are developed. This article introduces a fundamental tension between incentives and improvement in the provision of feedback. Using a sample of 4294 commercial logo design tournaments, I show that feedback reduces participation but improves the quality of subsequent submissions, with an ambiguous effect on high-quality output. To evaluate this trade-off, I develop a procedure to estimate agents' effort costs and simulate counterfactuals under alternative feedback policies. The results suggest that feedback on net increases the number of high-quality ideas produced and is thus desirable for a principal seeking innovation.

    Keywords: feedback; evaluation; learning; tournaments; innovation; Performance Evaluation; Motivation and Incentives; Rank and Position; Product Development; Learning;

    Citation:

    Gross, Daniel P. "Performance Feedback in Competitive Product Development."RAND Journal of Economics 48, no. 2 (Summer 2017): 438–466. View Details

Working Papers

  1. Creativity Under Fire: The Effects of Competition on Creative Production

    Daniel P. Gross

    Though fundamental to innovation and essential to many industries and occupations, individual creativity has received limited attention as an economic behavior and has historically proven difficult to study. This paper studies the incentive effects of competition on individuals' creative production. Using a sample of commercial logo design competitions, and a novel, content-based measure of originality, I find that intensifying competition induces agents to produce original, untested ideas over tweaking their earlier work, but heavy competition drives them to stop investing altogether. The results yield lessons for the management of creative workers and for the implementation of competitive procurement mechanisms for innovation.

    Keywords: creativity; incentives; tournaments; competition; radical vs. incremental innovation; Motivation and Incentives; Competition; Creativity; Innovation and Invention;

    Citation:

    Gross, Daniel P. "Creativity Under Fire: The Effects of Competition on Creative Production." Harvard Business School Working Paper, No. 16-109, March 2016. (Revised June 2017.) View Details
  2. Performance Feedback in Competitive Product Development

    Daniel P. Gross

    Performance feedback is ubiquitous in competitive settings where new products are developed. This paper introduces a fundamental tension between incentives and improvement in the provision of feedback. Using a sample of 4,000 commercial logo-design tournaments, I show that feedback reduces participation but improves the quality of subsequent submissions, with an ambiguous effect on high-quality output. To evaluate this tradeoff, I develop a procedure to estimate agents' effort costs and simulate counterfactuals under alternative feedback policies. The results suggest that feedback on net increases the number of high-quality ideas produced and is thus desirable for a principal seeking innovation.

    Keywords: feedback; evaluation; learning; tournaments; innovation; Performance Evaluation; Motivation and Incentives; Rank and Position; Product Development;

    Citation:

    Gross, Daniel P. "Performance Feedback in Competitive Product Development." Harvard Business School Working Paper, No. 16-110, March 2016. (Revised June 2016.) View Details
  3. Scale versus Scope in the Diffusion of New Technology

    Daniel P. Gross

    Using the farm tractor as a case study, I show that lags in technology diffusion arise along two distinct margins: scale and scope. Though tractors are now used in nearly every agricultural field operation and in the production of nearly all crops, they first developed with much more limited application, and early diffusion was accordingly limited in scope until tractor technology generalized. The results are consistent with theory and other historical examples, suggesting that the key to understanding technology diffusion lies not only in explaining the number of different users, but also in explaining the number of different uses.

    Keywords: technology diffusion; spatial technology diffusion; farm tractors; R&D; general-purpose technologies; Technology Adoption; Agribusiness; Transportation; Agriculture and Agribusiness Industry; United States;

    Citation:

    Gross, Daniel P. "Scale versus Scope in the Diffusion of New Technology." Harvard Business School Working Paper, No. 16-108, March 2016. View Details
  4. The Ties That Bind: Railroad Gauge Standards, Collusion, and Internal Trade in the 19th Century U.S.

    Daniel P. Gross

    Technology standards are pervasive in the modern economy, and a target for public and private investments, yet evidence on their economic importance is scarce. I study the conversion of 13,000 miles of railroad track in the U.S. South to standard gauge between May 31 and June 1, 1886 as a large-scale natural experiment in technology standards adoption that instantly integrated the South into the national transportation network. Using route-level freight traffic data, I find a large redistribution of traffic from steamships to railroads serving the same route that declines with route distance, with no change in prices and no evidence of effects on aggregate shipments, likely due to collusion by Southern carriers. Counterfactuals using estimates from a joint model of supply and demand for North-South freight transport suggest that if the cartel were broken, railroads would have passed through 50% of their cost savings from standardization, generating a 10% increase in trade on the sampled routes. The results demonstrate the economic value of technology standards and the potential benefits of compatibility in recent international treaties to establish transcontinental railway networks, while highlighting the mediating influence of product market competition on the public gains to standardization.

    Keywords: railroad gauge; Standards; Integration; incompatibility; trade; United States;

    Citation:

    Gross, Daniel P. "The Ties That Bind: Railroad Gauge Standards, Collusion, and Internal Trade in the 19th Century U.S." Harvard Business School Working Paper, No. 17-044, December 2016. View Details

Cases and Teaching Materials

  1. The De Beers Group: Exploring the Diamond Reselling Opportunity

    Benjamin C. Esty, Daniel P. Gross and Lauren G. Pickle

    In September 2014, Tom Montgomery (SVP of strategic initiatives at the De Beers Group) and his team launched a pilot program in the United States to explore $1 billion diamond market for pre-owned (recycled) diamonds. According to Montgomery, the motivation for the pilot program was to improve the consumer reselling experience and to enhance "diamond equity". Somewhat paradoxically, consumers typically received very low prices when they tried to sell diamonds (5-20% of the priginal retail price) leaving them reluctant to purchase diamonds in the future and making them into ambassadors of ill will. At a meeting scheduled for November 2015, the De Beers Executive Committee would have to decide whether to end the pilot program, extend it for another year to gather more information, or convert it into a new standalone business unit. Because De Beers had historically focused on producing rough diamonds (the "upstream" business), yet the new business unit offered an opportunity to enter and enhance the market for polished diamonds (the "downstream" business), the decision was particularly noteworthy.

    Keywords: Diamonds; corporate strategy; Go-to-market strategy; secondary market; willingness to pay; pilot program; strategy development; strategy execution; Vertical Integration; scope; marketing; advertising; branding; customer value; pawn shops; Jewelry; supply and demand; Corporate Strategy; Business Strategy; Vertical Integration; Advertising Campaigns; Value Creation; Retail Industry; Consumer Products Industry; Advertising Industry; Mining Industry; United States; United Kingdom; Africa; Botswana; South Africa; Namibia;

    Citation:

    Esty, Benjamin C., Daniel P. Gross, and Lauren G. Pickle. "The De Beers Group: Exploring the Diamond Reselling Opportunity." Harvard Business School Teaching Note 717-481, June 2017. View Details
  2. The De Beers Group: Exploring the Diamond Reselling Opportunity

    Benjamin C. Esty, Daniel P. Gross and Lauren G. Pickle

    In September 2014, Tom Montgomery (SVP of strategic initiatives at the De Beers Group) and his team launched a pilot program in the United States to explore the $1 billion diamond market for pre-owned (recycled) diamonds. According to Montgomery, the motivation for the pilot program was to improve the consumer reselling experience and to enhance "diamond equity". Somewhat paradoxically, consumers typically received very low prices when they tried to sell diamonds (5-20% of the original retail price) leaving them reluctant to purchase diamonds in the future and making them into ambassadors of ill will. At a meeting scheduled for November 2015, the De Beers Executive Committee would have to decide whether to end the pilot program, extend it for another year to gather more information, or convert it into a new standalone business unit. Because De Beers had historically focused on producing rough diamonds (the "upstream" business), yet the new business unit offered an opportunity to enter and enhance the market for polished diamonds (the "downstream" business), the decision was particularly noteworthy.

    Keywords: Diamonds; corporate strategy; Go-to-market strategy; secondary market; willingness to pay; pilot program; strategy development; strategy execution; Vertical Integration; scope; marketing; advertising; branding; customer value; pawn shops; Jewelry; supply and demand; Corporate Strategy; Business Strategy; Vertical Integration; Advertising Campaigns; Value Creation; Retail Industry; Consumer Products Industry; Advertising Industry; Mining Industry; United States; United Kingdom; Africa; Botswana; South Africa; Namibia;

    Citation:

    Esty, Benjamin C., Daniel P. Gross, and Lauren G. Pickle. "The De Beers Group: Exploring the Diamond Reselling Opportunity." Harvard Business School Spreadsheet Supplement 717-806, February 2017. View Details
  3. The De Beers Group: Exploring the Diamond Reselling Opportunity

    Benjamin C. Esty, Daniel P. Gross and Lauren G. Pickle

    In September 2014, Tom Montgomery (SVP of strategic initiatives at the De Beers Group) and his team launched a pilot program in the United States to explore the $1 billion diamond market for pre-owned (recycled) diamonds. According to Montgomery, the motivation for the pilot program was to improve the consumer reselling experience and to enhance "diamond equity." Somewhat paradoxically, consumers typically received very low prices when they tried to sell diamonds (5-20% of the original retail price) leaving them reluctant to purchase diamonds in the future and making them into ambassadors of ill will. At a meeting scheduled for November 2015, the De Beers Executive Committee would have to decide whether to end the pilot program, extend it for another year to gather more information, or convert it into a new standalone business unit. Because De Beers had historically focused on producing rough diamonds (the "upstream" business), yet the new business unit offered an opportunity to enter and enhance the market for polished diamonds (the "downstream" business), the decision was particularly noteworthy.

    Keywords: Diamonds; corporate strategy; Go-to-market strategy; secondary market; willingness to pay; pilot program; strategy development; strategy execution; Vertical Integration; scope; marketing; advertising; branding; customer value; pawn shops; Jewelry; supply and demand; Corporate Strategy; Business Strategy; Vertical Integration; Advertising Campaigns; Value Creation; Retail Industry; Consumer Products Industry; Advertising Industry; Mining Industry; United States; United Kingdom; Africa; Botswana; South Africa; Namibia;

    Citation:

    Esty, Benjamin C., Daniel P. Gross, and Lauren G. Pickle. "The De Beers Group: Exploring the Diamond Reselling Opportunity." Harvard Business School Case 717-430, February 2017. View Details