10/08/2015
4:10 pm - 6:10 pm

C325 Cheit Hall, Haas School of Business

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The Oliver E. Williamson Seminar on Institutional Analysis features current research of faculty, from UCB and elsewhere, and advanced doctoral students who are investigating the efficacy of economic and noneconomic forms of organization. In this seminar, an interdisciplinary perspective–combining aspects of law, economics and organization–is maintained. Markets, hierarchies, hybrids, bureaus, and the supporting institutions of law and politics all come under scrutiny. The aspiration is to progressively build towards a new science of organization.

The OEW Seminar meets on Thursdays from 4:10 – 6:00 pm in room C325 Cheit Hall. Outside speakers normally meet with interested students from 3:00 – 3:45 pm in the IBI Conference room located in room F402 (in the Faculty Wing of the Haas School).

For faculty and students wishing to schedule an appointment, or for more information on the Oliver E. Williamson Seminar, please contact Sandria Frost at sandria_frost@haas.berkeley.edu.

For more information including past seminar schedules please click here.

Fall 2015 Schedule

Abstract

This research examines the strategic conditions that drive entrepreneurial innovators to pursue novel innovation, rather than innovation that is closer to existing technologies. Since radical breakthrough innovation is harder to communicate than incremental counterpart, entrepreneurial innovators may be steered away from breakthrough innovation where the cost of developing credible information of breakthrough idea is exceedingly high. In the context of Orphan Drug Act (ODA), this study uses a difference- in-difference approach to measure whether entrepreneurs are more likely to bring novel innovation when the policy change unexpectedly lowers the cost of developing convincing information through a small market test. Using a new measure of novelty of innovation and a detailed panel dataset of therapeutic molecules, the empirical study finds that biotech startups bring more breakthrough drugs in the markets affected by ODA. This research also finds that, in the ODA-affected areas, entrepreneurs hold novel projects longer before contracting with large partners and to generate more revenue streams from pursuing novel innovation. Taken together, this study suggests that the cost of convincing hinders entrepreneurs to market novel innovation and that a public policy can moderate the inefficiency in “market for ideas” by decreasing communication cost.