Management Papers

Document Type

Journal Article

Date of this Version

2011

Publication Source

European Management Review

Volume

8

Issue

1

Start Page

17

Last Page

32

DOI

10.1111/j.1740-4762.2010.01002.x

Abstract

The market for knowledge has grown dramatically over the past decades. Extant work underscores the factors shaping market efficacy: (a) the cost of searching for innovative knowledge; (b) asymmetric-information between inventors and investors; and (c) the inherent difficulty in maintaining ownership over knowledge. Recently, market transactions have been taking place online, matching disperse owners (entrepreneurs or inventors), and seekers (investors or licensees), of knowledge. This phenomenon constitutes a sharp departure from past practices where transactions tend to materialize around one's social circle (e.g., venture capitalists' social ties). We investigate the drivers of market efficacy in a setting where social ties are not available ex-ante, and identify alternative market mechanisms that emerge in such settings. Using novel hand-collected data for 30 online knowledge marketplaces, we find overwhelming evidence of adverse-selection-mitigating mechanisms (e.g., screening through upfront fees and disclosure requirements). We discuss theoretical explanations that are consistent with the observed mechanisms.

Copyright/Permission Statement

This is the peer reviewed version of the following article: DUSHNITSKY, G. and KLUETER, T. (2011), Is There an eBay for Ideas? Insights from Online Knowledge Marketplaces. , which has been published in final form at http://onlinelibrary.wiley.com/wol1/doi/10.1111/j.1740-4762.2010.01002.x/abstract. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.

Keywords

market for ideas, entrepreneurship, innovation, open innovation, venture capital

 

Date Posted: 27 November 2017

This document has been peer reviewed.