Innovation and Product Risk: Firm Strategy and Public Welfare

Matthew Grennan, Health Care Management, The Wharton School; Robert Town, the University of Texas at Austin; and Allan Collard-Wexler, Stern School of Business

Abstract: Innovative new products come with hope, but also risk that they will not work as well as hoped. Thus testing and monitoring are key strategic decisions of an innovative firm in any market, and in some markets these strategic decisions will be intertwined with government regulatory policy. This research explores this issue in the empirical context of medical device markets, where regulatory approaches vary widely across the world, and are the topic of current policy debate.