Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • May 2021
  • Article
  • Management Science

Risk-Mitigating Technologies: The Case of Radiation Diagnostic Devices

By: Alberto Galasso and Hong Luo
  • Format:Print
ShareBar

Abstract

We study the impact of consumers’ risk perception on firm innovation. Our analysis exploits a major surge in the perceived risk of radiation diagnostic devices following extensive media coverage of a set of over-radiation accidents involving CT scanners in late 2009. Using data on radiation diagnostic device patents and FDA product clearances, we find that the increased perception of radiation risk spurred the development of new technologies that mitigated such risk and led to a greater number of new products. Using CT scanners as a case study, we provide an in-depth characterization of two different types of risk-mitigating technologies that firms developed after the shock. Firm-level analysis shows that while firms were similarly responsive in their patenting activities, large incumbents were significantly more responsive than smaller firms in terms of new product introductions; and, in the case of CT scanners, large incumbents were also significantly more responsive in terms of the more-radical type of risk-mitigating technologies. We also provide qualitative evidence and describe patterns of equipment usage and upgrade that are consistent with increased risk perception and, consequently, a greater willingness to pay for safety. Overall, our findings suggest that changes in risk perception can be an important driver of innovation, can shape the direction of technological progress, and can impact market structure.

Keywords

Risk Perception; Innovation; Medical Devices; Liability Risk; Risk and Uncertainty; Perception; Technological Innovation

Citation

Galasso, Alberto, and Hong Luo. "Risk-Mitigating Technologies: The Case of Radiation Diagnostic Devices." Management Science 67, no. 5 (May 2021): 3022–3040.
  • Find it at Harvard
  • Read Now

About The Author

Hong Luo

Strategy
→More Publications

More from the Authors

    • 2022
    • Faculty Research

    Laboratory Safety and Research Productivity

    By: Alberto Galasso, Hong Luo and Brooklynn Zhu
    • May 2022
    • American Economic Journal: Economic Policy

    When Does Product Liability Risk Chill Innovation? Evidence from Medical Implants

    By: Alberto Galasso and Hong Luo
    • March 2022 (Revised April 2022)
    • Faculty Research

    Spotify's Audio-First Strategy: Leading the Podcasting Market

    By: Hong Luo and Carol Lin
More from the Authors
  • Laboratory Safety and Research Productivity By: Alberto Galasso, Hong Luo and Brooklynn Zhu
  • When Does Product Liability Risk Chill Innovation? Evidence from Medical Implants By: Alberto Galasso and Hong Luo
  • Spotify's Audio-First Strategy: Leading the Podcasting Market By: Hong Luo and Carol Lin
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College