Market Failure in the Diffusion of User Innovations: The Case of 'Off-Label' Innovations by Medical Clinicians

Hippel, Eric A. von; DeMonaco, Harold J.; Jong, Jeroen P.J. de

doi:10.2139/ssrn.2275562

Cited by 13 publications

(12 citation statements)

References 24 publications

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“…As 85% of the respondents in our sample use the Internet, and of these 71% use social networks, the reported level of solution sharing over the Internet appears low. Non-sharing of potentially useful solutions developed by individual citizens has been identified as a market failure in the user innovation literature [23]. Future research should explore diffusion incentives and effective channels for diffusion, taking into consideration that different age groups may have different requirements and behavioral patterns.…”

Section: Discussionmentioning

confidence: 99%

Innovation by Patients with Rare Diseases and Chronic Needs

Oliveira

Zejnilović²,

Canhão

et al. 2014

SSRN Journal

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We provide the first empirical exploration of disease-related innovation by patients and their caregivers. Our aims were to explore to what degree do patients develop innovative solutions; how many of these are unique developments; and do these solutions have positive perceived impact on the patients' overall quality of life? In addition, we explored the factors associated with patient innovation development, and sharing of the solutions that the patients developed. Methods: We administered a questionnaire via telephone interviewing to a sample of 500 rare disease patients and caregivers. The solutions reported were pre-screened by the authors for their fit with the self-developed innovation aim of the study. All the reported solutions were then validated for their novelty by two medical professionals. Logistic regression models were used to test the relationships between our key variables, patient innovation and solution sharing.Results: 263 (53%) of our survey respondents reported developing and using a solution to improve management of their diseases. An initial screening removed 81 (16%) solutions for being an obvious misfit to the self-developed innovation aim of the study. This lowered the sample of potentially innovative solutions to 182 (36%). Assessment of novelty and usefulness of the solutions, conducted by two medical evaluators, confirmed that 40 solutions (8%) were indeed novel, while the remaining 142 (28%) were already known to medicine. The likelihood of patient innovation increased as the education level increased (OR 2, p < 0.05), and as their perception of limitations imposed by their disease increased (OR 1.3, p < 0.05). 55 individuals diffused their solutions to some degree, with 50 of these sharing via direct diffusion to other patients. There is a positive relationship between the impact of a solution on the respondents' overall quality of life and likelihood of solution sharing.Conclusions: Given that hundreds of millions of people worldwide are afflicted by rare diseases, patient and their caregivers can be a tremendous source of innovation for many who are similarly afflicted. Our findings suggest that many patients could be greatly assisted by improved diffusion of known solutions and best practices to and among patients and their caregivers.

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Section: Discussionmentioning

confidence: 99%

Innovation by Patients with Rare Diseases and Chronic Needs

Oliveira

Zejnilović²,

Canhão

et al. 2014

SSRN Journal

Self Cite

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“…We expect noninnovating users to have imperfect knowledge of the innovating users' designs, to be less skilled at selfprovisioning them, and to benefit less from using them (µ ≤ λ and µ ≤ 1). With respect to imperfect knowledge and higher costs of self-provisioning, consider that innovating users may well regard careful design documentation for the benefit of potential adopters to be an unprofitable chore in the case of freely revealed designs (de Jong et al 2015, von Hippel et al 2014. With respect to lower levels of benefit, consider that the designs were developed to precisely suit the innovating users' individual tastes.…”

Section: Individual Market Demands Of Innovatingmentioning

confidence: 99%

The User Innovation Paradigm: Impacts on Markets and Welfare

2017

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Abstract. Innovation has traditionally been seen as the province of producers. However, theoretical and empirical research now shows that individual users-consumers-are also a major and increasingly important source of new product and service designs. In this paper, we build a microeconomic model of a market that incorporates demand-side innovation and competition. We explain the conditions under which firms find it beneficial to invest in supporting and harvesting users' innovations, and we show that social welfare rises when firms utilize this source of innovation. Our modeling also indicates reasons for policy interventions with respect to a mixed user and producer innovation economy. From the social welfare perspective, as the share of innovating users in a market increases, profit-maximizing firms tend to switch "too late" from a focus on internal research and development to a strategy of also supporting and harvesting user innovations. Underlying this inefficiency are externalities that the producer cannot capture. Overall, our results explain when and how the proliferation of innovating users leads to a superior division of innovative labor involving complementary investments by users and producers, both benefitting producers and increasing social welfare.

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“…First, open innovation is usually free with a positive externality where most people don’t have to create innovation and just enjoy it without cost. This leads to less investment in open innovation that is a highly valuable to society (von Hippel, DeMonaco, & de Jong, 2014). However, altruistic innovative groups can solve this market failure and beat self-interested groups (Wilson, 2015).…”

Section: Public Motivation and Open Innovationmentioning

confidence: 99%

Exploring Neglected Aspects of Innovation Function: Public Motivation and Non-pecuniary Values

Jung

Lee

Workman

2016

Science, Technology and Society

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The traditional innovation function, focusing on extrinsic motivations such as economic benefits and returns, has neglected the side of intrinsic values and public motivations for innovation function. Recent innovation examples in an era of mobile network and web-based information environment pursue open connected innovations such as open source movement and crowding source. Such open, collective and social innovations result from strong public motivation and trust network. Although previous studies argue the potential effects of intrinsic values on innovative attitude, research has not yet provided a comprehensive empirical evidence on how innovative attitude is associated with intrinsic and public motivations. Little empirical research remains for the impact of public motivations and intrinsic values on innovative attitudes. This study, relying on nationally represented survey (n = 3,188) in South Korea, explores an empirical link between public motivations and innovative attitudes to explore and allow new ideas. We found that public interest, empathy, altruism and job involvement facilitate innovative attitude to pursue and accept new ideas and suggestions. This implies that both intrinsic values (job enjoyment and satisfaction) and public motivations (public interests, empathy and altruism) are crucial factors to promote innovative attitudes. We also found strong non-linear relationships between satisfaction, trust and innovative attitude. We discuss implications for future innovation function of intrinsic and public motivations in terms of the process of social construction.

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Market Failure in the Diffusion of User Innovations: The Case of 'Off-Label' Innovations by Medical Clinicians

Cited by 13 publications

References 24 publications

Innovation by Patients with Rare Diseases and Chronic Needs

Innovation by Patients with Rare Diseases and Chronic Needs

The User Innovation Paradigm: Impacts on Markets and Welfare

Exploring Neglected Aspects of Innovation Function: Public Motivation and Non-pecuniary Values

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