Project summary
Project B04 explores the interplay between firms, innovation, and institutions to understand their collective impact on societal and economic outcomes. It aims to deepen insights into firm behavior regarding innovation and growth along three dimensions: the role and effects of “superstar firms,” the interaction of new technologies with behavioral biases, and the organization of knowledge flows. The project focusses on three key dimensions: the market power of superstar firms and its potential to hinder innovation, the behavioral implications of emerging technologies such as AI, and institutional mechanisms that mitigate knowledge transfer frictions. The upcoming funding period will extend investigations into the causes and consequences of increased market concentration on innovation, growth, and welfare, into behavioral aspects of new technologies and their potential of reducing or changing biases, and into institutional solutions to enhance innovation and knowledge diffusion, like bankruptcy laws and patent systems.