<p>Biased information about the payoffs received by others can drive innovation, risk-taking, and investment booms. We study this cultural phenomenon using a model based on two premises. The first premise is a tendency for large successes, and the actions that lead to them, to be more salient to...</p>

Biased information about the payoffs received by others can drive innovation, risk-taking, and investment booms. We study this cultural phenomenon using a model based on two premises. The first is a tendency for large successes, and the actions that lead to them, to be more salient to onlookers...

Instructional presentation slides.What drives innovation, risk taking, and investment booms? We study these phenomena using a model of decision making by firms that make biased observations of prior returns. We assume that firms are more likely to observe large successes than small successes or...