FEAR OF NOVELTY: A MODEL OF SCIENTIFIC DISCOVERY WITH STRATEGIC UNCERTAINTY

This paper analyzes the production of fundamental research as a coordination game played by scholars. In the model, scholars decide to adopt a new idea only if they believe that a critical mass of peers is following a similar research strategy. If researchers observe only a noisy idiosyncratic signal of the true scientific potential of a new idea, we show that the game presents a single threshold equilibrium. In this environment, fundamental research proceeds with large structural breaks followed by long periods of time in which new ideas are unsuccessful. The likelihood of a new idea emerging depends on various parameters, including the rewards of working in the old paradigm, the critical mass of researchers required to create a new school of thought and scholars' ability to properly assess the scientific value of new ideas. (JEL O31, C72, A14)