Profiting from voluntary information spillovers: How users benefit by freely revealing their innovations
Empirical studies of innovation have found that end users frequently develop important product and process innovations. Defying conventional wisdom on the negative effects of uncompensated spillovers, innovative users also often openly reveal their innovations to competing users and to manufacturers...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | en_US |
| Published: |
Cambridge, MA; Alfred P. Sloan School of Management, Massachusetts Institute of Technology
2011
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| Subjects: | |
| Online Access: | http://hdl.handle.net/1721.1/66264 |
| _version_ | 1826204597687943168 |
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| author | Harhoff, Dietmar Henkel, Joachim von Hippel, Eric A. |
| author_facet | Harhoff, Dietmar Henkel, Joachim von Hippel, Eric A. |
| author_sort | Harhoff, Dietmar |
| collection | MIT |
| description | Empirical studies of innovation have found that end users frequently develop important product and process innovations. Defying conventional wisdom on the negative effects of uncompensated spillovers, innovative users also often openly reveal their innovations to competing users and to manufacturers. Rival users are thus in a position to reproduce the innovation in-house and benefit from using it, and manufacturers are in a position to refine the innovation and sell it to all users, including competitors of the user revealing its innovation. In this paper we explore the incentives that users might have to freely reveal their proprietary innovations. We then develop a game-theoretic model to explore the effect of these incentives on users’ decisions to reveal or hide their proprietary information. We find that, under realistic parameter constellations, free revealing pays. We conclude by discussing some implications of our findings. |
| first_indexed | 2024-09-23T12:57:59Z |
| format | Working Paper |
| id | mit-1721.1/66264 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T12:57:59Z |
| publishDate | 2011 |
| publisher | Cambridge, MA; Alfred P. Sloan School of Management, Massachusetts Institute of Technology |
| record_format | dspace |
| spelling | mit-1721.1/662642019-04-12T14:55:35Z Profiting from voluntary information spillovers: How users benefit by freely revealing their innovations Harhoff, Dietmar Henkel, Joachim von Hippel, Eric A. innovation lead users spillovers Empirical studies of innovation have found that end users frequently develop important product and process innovations. Defying conventional wisdom on the negative effects of uncompensated spillovers, innovative users also often openly reveal their innovations to competing users and to manufacturers. Rival users are thus in a position to reproduce the innovation in-house and benefit from using it, and manufacturers are in a position to refine the innovation and sell it to all users, including competitors of the user revealing its innovation. In this paper we explore the incentives that users might have to freely reveal their proprietary innovations. We then develop a game-theoretic model to explore the effect of these incentives on users’ decisions to reveal or hide their proprietary information. We find that, under realistic parameter constellations, free revealing pays. We conclude by discussing some implications of our findings. 2011-10-14T19:45:27Z 2011-10-14T19:45:27Z 2009-01 Working Paper http://hdl.handle.net/1721.1/66264 en_US MIT Sloan School of Management Working Paper;4749-09 application/pdf Cambridge, MA; Alfred P. Sloan School of Management, Massachusetts Institute of Technology |
| spellingShingle | innovation lead users spillovers Harhoff, Dietmar Henkel, Joachim von Hippel, Eric A. Profiting from voluntary information spillovers: How users benefit by freely revealing their innovations |
| title | Profiting from voluntary information spillovers: How users benefit by freely revealing their innovations |
| title_full | Profiting from voluntary information spillovers: How users benefit by freely revealing their innovations |
| title_fullStr | Profiting from voluntary information spillovers: How users benefit by freely revealing their innovations |
| title_full_unstemmed | Profiting from voluntary information spillovers: How users benefit by freely revealing their innovations |
| title_short | Profiting from voluntary information spillovers: How users benefit by freely revealing their innovations |
| title_sort | profiting from voluntary information spillovers how users benefit by freely revealing their innovations |
| topic | innovation lead users spillovers |
| url | http://hdl.handle.net/1721.1/66264 |
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