A Mathematical Approach to Relative Innovation

• In Event: 3522 - Section on Economic Sociology Refereed Roundtable Session
  In Refereed Roundtable 100min: Table 05. Innovation in Markets and Fields

Abstract

Scholars and practitioners have long debated the merits of first-mover advantages (FMA) versus second-mover advantages. One the one hand, benefits derived from FMA include capturing value by appropriating a particular product or process, access to, or ownership of certain assets before competitors have the chance to follow suit. On the other hand, first-movers may suffer from a lack of legitimacy. As a way to alleviate some tension between these views about the advantages of first- versus second-movers, we develop new measures based on whether a product represents a deviation from previous firm products or products on the market. Results from a preliminary study provide clear support for second-mover advantages. Drugs that are both familiar to the firm and exist on the market, but are used in a new way, are more likely to be successful.

Authors

• Jared Thorpe, Brigham Young University

• Eric C. Dahlin, Brigham Young University