Entrepreneurs and new ideas
نویسندگان
چکیده
We take the view (advanced, among others, by Schumpeter) that new ideas are original combinations of existing elements. While many random combinations are useless, some represent combinations which ”...t” together, aggregating di¤erent components in a novel and functional way. Thus, in order to appraise an innovative idea it is necessary to have specialized experts examine whether each of its di¤erent complementary dimensions ...ts; an innovative idea may be pro...table only if, say, it is technically feasible, legally patentable and there is a su¢cient consumer demand for it. Thus, signals are complementary rather than additive (the usual assumption in ...nance for evaluating existing assets). As a result, an entrepreneur must aggregate complementary expertises by forming a partnership in order to assess and implement an innovative idea. This process is very delicate, as experts observe privately their signals, and may steal a good idea. Strong complementarity of signals mitigates the risk of idea stealing because it incentivizes each expert to join the partnership, in order to bene...t from the high marginal informativeness of the signal by the other partners. Interestingly, an entrepreneur may not be able to design a partnership if the idea is too good. Preliminary draft January 2002
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