Toward behavioural innovation economics â Heuristics and biases
Toward behavioural innovation economics – Heuristics and biases in choice under novelty Page 1 of 25
This is the html version of the file http://espace.library.uq.edu.au/eserv/UQ:159497/DP379November2008.pdf. Google automatically generates html versions of documents as we crawl the web.
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Toward behavioural innovation economics – Heuristics and biases in choice under novelty Kate Morrison Think Play Do Consulting, Imperial College, London, UK.
Jason Potts Centre for Creative Innovation, Queensland University of Technology, Australia, & City University, London, UK. School of Economics, University of Queensland, Brisbane, Australia
ABSTRACT. A framework for ‘behavioural innovation economics’ is proposed here as a synthesis of
behavioural economics and innovation economics in the specific context of choice under novelty. We seek to apply the heuristics and biases framework of behavioural economics to the study of the innovation process in order to map and analyze systematic choice failures in the innovation process. We elaborate the distinction between choice under uncertainty and choice under novelty, as well as drawing out the ‘efficient innovation hypothesis’ implicit in most behavioural models of innovation. The subject domain of a research program for behavioural innovation economics is then briefly outlined in terms of a catalogue of characteristic ways in which choice under novelty renders innovation processes subject to failure. Key Words: bounded rationality, novelty, innovation process, innovation failure. (JEL: D8, D9, L2, O3)
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INTRODUCTION
Innovation studies have long drawn on behavioural economics foundations to model the innovation process by representing the implicit choice context in terms of bounded rationality and adaptive decision heuristics (Simon 1955; Loasby 1976). Boundedly rational entrepreneurs, managers, investors and consumers regularly populate models of the innovation process (Dosi 1988; Earl 1990; Dosi et al
http://74.125.155.132/scholar?q=cache:3U_0Mrkrud8J:scholar.google.com/&hl=en&as_s... 24/08/2010
This is the html version of the file http://espace.library.uq.edu.au/eserv/UQ:159497/DP379November2008.pdf. Google automatically generates html versions of documents as we crawl the web.
Page 1
Toward behavioural innovation economics – Heuristics and biases in choice under novelty Kate Morrison Think Play Do Consulting, Imperial College, London, UK.
Jason Potts Centre for Creative Innovation, Queensland University of Technology, Australia, & City University, London, UK. School of Economics, University of Queensland, Brisbane, Australia
ABSTRACT. A framework for ‘behavioural innovation economics’ is proposed here as a synthesis of
behavioural economics and innovation economics in the specific context of choice under novelty. We seek to apply the heuristics and biases framework of behavioural economics to the study of the innovation process in order to map and analyze systematic choice failures in the innovation process. We elaborate the distinction between choice under uncertainty and choice under novelty, as well as drawing out the ‘efficient innovation hypothesis’ implicit in most behavioural models of innovation. The subject domain of a research program for behavioural innovation economics is then briefly outlined in terms of a catalogue of characteristic ways in which choice under novelty renders innovation processes subject to failure. Key Words: bounded rationality, novelty, innovation process, innovation failure. (JEL: D8, D9, L2, O3)
1
INTRODUCTION
Innovation studies have long drawn on behavioural economics foundations to model the innovation process by representing the implicit choice context in terms of bounded rationality and adaptive decision heuristics (Simon 1955; Loasby 1976). Boundedly rational entrepreneurs, managers, investors and consumers regularly populate models of the innovation process (Dosi 1988; Earl 1990; Dosi et al
http://74.125.155.132/scholar?q=cache:3U_0Mrkrud8J:scholar.google.com/&hl=en&as_s... 24/08/2010
