Deals not done: Sources of failure in the market for ideas

Agrawal, Ajay; Cockburn, Iain M.; Zhang, Laurina

doi:10.1002/smj.2261

Cited by 50 publications

(74 citation statements)

References 37 publications

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“…Prior work has investigated a host of factors that influence the way prospective sellers and buyers identify each other and interact in the market for technology (Agrawal et al, 2015b;Arora et al, 2001;Gans & Stern, 2003). This study focuses on three of the most salient frictions this literature identifies, which relate to (a) the cost of searching for quality inventions across different geographies and companies, (b) the challenge of communicating and assessing technologies when ambiguity exists about the underlying knowledge and its potential applications, and (c) the difficulty of appropriating the value of an invention (Akerlof, 1970;Coase, 1960;Levin et al, 1987;Teece, 1986).…”

Section: The Market For Technologymentioning

confidence: 99%

“…Absent a mechanism to address these frictions, they can substantially affect the process by which sellers and buyers notice and identify each other and in the extreme case may distort the market for technology altogether (Agrawal et al, 2015b). Indeed, anecdotal evidence suggests that many viable technologies can remain "locked" or underused within firms (BTG, 1998;Danneels, 2007;Giuri et al, 2007;Rivette & Kline, 2000).…”

Section: The Market For Technologymentioning

confidence: 99%

“…Markets for ideas and technologies have grown dramatically over recent decades and are receiving increasing attention from both scholars and practitioners (Agrawal, Cockburn, & Zhang, 2015b;Arora, Fosfuri, & Gambardella, 2001;Rivette & Kline, 2000). The result is a large body of work investigating a broad range of issues important for the market for technology.…”

Section: Introductionmentioning

confidence: 99%

“…However, while a growing number of firms participate in such online marketplaces (Agrawal et al, 2015b), we still know little about which industries are actually served by online technology markets in the first place.…”

Section: Introductionmentioning

confidence: 99%

“…We focus on the metropolitan areas covered by Zillow, independent of which properties are ultimately sold. This initial search and identification of sellers and buyers -a stage which precedes the actual bilateral negotiations or deal-making between a pair of participants -has been shown as one of the most crucial but challenging stages in the market for technology, (Agrawal et al, 2015b).…”

Section: Introductionmentioning

confidence: 99%

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Which industries are served by online marketplaces for technology?

Dushnitsky

Klueter²

2017

Research Policy

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This study investigates a recent phenomenon in the market for technology: online marketplaces for technological inventions, which support the listing, search, and exchange of technological inventions by sellers and buyers. Focusing on three salient theoretical factors that affect markets for technology -search costs, ambiguity about the underlying knowledge and its applications, and expropriation concerns -our research systematically explores which industries are served by online marketplaces. We exploit the fact that the magnitude of these factors varies across industries and identify key features of online marketplaces that may address these factors. Our proprietary dataset covers 12 online marketplaces for technology and spans over 140 industries. The results indicate that online marketplaces are more likely to serve an industry with (a) a higher cost of searching for technologies in that industry, (b) greater ambiguity about the underlying technology's potential applications across industries, and (c) greater ability to protect inventions from expropriation.

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Section: The Market For Technologymentioning

confidence: 99%

Section: The Market For Technologymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Which industries are served by online marketplaces for technology?

Dushnitsky

Klueter²

2017

Research Policy

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Pipes, prisms, and patent sales: How personal wealth expands and contracts the gender gap in entrepreneurship

McGrath

Chen

Nerkar

2022

Strategic Entrepreneurship

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Does the market for ideas influence the rate and direction of innovative activity? Evidence from the medical device industry

Chatterji

Fabrizio

2015

Strategic Management Journal

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Prior work argues that the "market for ideas" supports an open system of innovation, allowing for efficient development of technology across firms. Although this literature has described important features of this market, how it influences the rate and direction of innovation remains an open question. We exploit an exogenous shock to a subset of U.S. medical device firms to study this question. We first document the breakdown in the market for ideas after a federal investigation made it more difficult for the leading orthopedic firms to work with physician-inventors. We then present evidence of a dramatic decline in the rate of innovation for these firms. Further, a marked shift in direction occurs toward lower-quality inventions and away from product categories where physician knowledge is critical.

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Deals not done: Sources of failure in the market for ideas

Cited by 50 publications

References 37 publications

Which industries are served by online marketplaces for technology?

Which industries are served by online marketplaces for technology?

Pipes, prisms, and patent sales: How personal wealth expands and contracts the gender gap in entrepreneurship

Does the market for ideas influence the rate and direction of innovative activity? Evidence from the medical device industry

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