The speed of new ideas
Subtitle: trust, institutions and the diffusion of new products
By: Felix Oberholzer-Gee, Victor Calanog
Contributors: Calanog, Victor; Harvard Business School. Division of Research
Series: Working paper / Division of Research, Harvard Business School -- 07-063; Working paper (Harvard Business School. Division of Research) -- 07-063
Publisher: Division of Research, Harvard Business School
Published: 2007
Place of publication: Boston
Language: eng
Number of pages: 28
Description: Trust in buyer-supplier relationships is sometimes regarded as a competitive advantage because trust can increase the gains from trade for firms and their suppliers. In this study, we document a particular type of competitive advantage conferred by trust. Using adoption rates of a new product as a case study, we show that trust protects current suppliers from competitors who offer innovative products. Buyers who trust their current suppliers are less likely to seek information about the new product and they express less interest in purchasing it. Once the product becomes available, they do in fact make fewer purchases. We also find that entrepreneurs from lesstrusted groups – in this study, African-Americans – find it particularly difficult to overcome the barriers erected by trust. Trust, we conclude, confers competitive advantage by slowing down the diffusion of new ideas and products in the economy. As trust is built up over time, earning a buyer’s trust confers a significant first-mover advantage.
Notes: " "--Added t.p.

Includes bibliographical references.