Innovation in firms: Experimentation and strategic communication

• 成果类型: Article
• 署名作者: Azinovic-Yang, Li; Baldenius, Tim
• 署名单位: University of Chicago; Columbia University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101; 1879-1980
• DOI: 10.1016/j.jacceco.2025.101830
• 发表日期: 2026-02
• 页码: 101830
• 关键词: innovation; Capital budgeting; DELEGATION; exploration versus exploitation; strategic communication; incentives; disclosure; authority

摘要

How does information asymmetry within firms affect their innovation incentives? To address this question, we introduce an agency problem with strategic reporting into an experimentation setting. Severe agency problems disrupt truthful reporting, and thereby also experimentation. However, for moderate agency problems, the firm may experiment more than in a symmetric information setting, because experimenting improves the agent's reporting incentives. Unlike traditional real-options models, experimentation may be optimal even if an early success would imply no better future profit prospects than a routine project. The innovations brought about in such a manner tend to be either incremental or radical in nature, rather than moderate. We discuss the robustness of our findings with regard to the mutual exclusiveness of projects in each period (allowing for project sampling), the parties' commitment power, endogenous option values, etc.