The effects of economic status and recent experience on innovative behavior under environmental variability: An experimental approach

We build and empirically test a model that predicts the display of innovative behavior as a function of environmental change, with recent experience and economic status acting as moderators. We start with the model developed by Slevin (1971), which evolved from the so-called innovation boundary. This is the threshold beyond which the display of innovative behavior becomes attractive. We show how environmental change creates uncertainty about the position of the innovation boundary; however, this uncertainty is reduced by recent experiences. Furthermore, economic status serves as both an enhancer and an inhibitor of innovation. Our model was tested and largely confirmed in two experiments: one conducted in a laboratory setting and one conducted as a discrete choice experiment. Currently experiments are rarely conducted in the field of innovation studies. By presenting this evidence we also hope to encourage more authors to conduct experiments in their work.

► We develop a model predicting innovative behavior of agents.
► Environmental change is the independent variable; recent experience and economic status are moderators.
► Our model is largely confirmed in a laboratory experiment and a stated discrete choice experiment.
► Economic status is related through an inverted U-shape to innovation in stable environments.
► Recent experiences guides future behavior in stable and variable environments.