We Should Treat Algorithms like Prescription Drugs
Citation:
Coravos, Andy, Irene Chen, Ankit Gordhandas, and Ariel Dora Stern. "We Should Treat Algorithms like Prescription Drugs." Quartz (February 14, 2019). View Details|
Working Paper HBS Working Paper Series 2019 Pioneer (Dis-)advantages in Markets for Technology |
Abstract
This study sheds new light on first- and early-mover advantages. Research on this classic topic often assumes that each firm participates in the entirety of the innovation process. However, a division of labor between innovative new entrants and incumbents with complementary assets is common in many industries. In such settings, small new entrants have the additional option to be acquired in a “market for technology.” Using data from the U.S. medical device industry, we find that pioneers “pave the way” for a new product type to reduce the technological and market risks, where the former is of paramount importance. Pioneers ultimately realize a higher likelihood of acquisition but wait longer to be acquired. Therefore, to some extent, later movers can free ride on early-movers’ efforts.
Keywords: first-mover advantage; Innovation Strategy; Market Entry and Exit; Acquisition; Technology;
Citation:
Fischer, Moritz, Joachim Henkel, and Ariel Dora Stern. "Pioneer (Dis-)advantages in Markets for Technology." Harvard Business School Working Paper, No. 19-043, October 2018. (Revised January 2019.)
