The curse of innovation
Subtitle: a theory of why innovative new products fail in the marketplace
By: John T. Gourville
Series: Working paper / Division of Research, Harvard Business School -- 06-014; Working paper (Harvard Business School. Division of Research) -- 06-014
Publisher: Division of Research, Harvard Business School
Published: 2005
Place of publication: Boston
Language: eng
Number of pages: 34
Description: Highly innovative products fail in the marketplace at significant rates. In this paper, we offer a behavioral framework to explain this failure. We begin with the behavior change inherent in most innovations. We then add reference dependence and loss aversion, arguing that the typical consumer is endowed with the entrenched alternative and the typical developer is entrenched with their innovation. As a direct result, consumers tend to undervalue and developers tend to overvalue such an innovation relative to the existing option. This is the "curse of innovation" and it systematically increases the likelihood of failure for a highly innovative new product.
Notes: "August 2005 Draft."

Includes bibliographical references.