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<p>Entrepreneurs often must decide how much to invest in bringing an invention to market when neither the odds of commercialization success nor the risk of displacement by later innovations are known with certainty. To analyze this setting, we extend the Aghion–Howitt model of creative destruction by introducing an explicit entrepreneurial commercialization stage and allowing key probabilities to be ambiguous, in the sense that decision-makers cannot assign a unique probability distribution over a fixed and understood set of contingencies. In equilibrium, ambiguity shortens perceived rent horizons, curbs commercialization effort and research, and thereby reduces growth by lowering the rate at which research attempts are converted into frontier-raising innovations. We also extend the framework to heterogeneous entrepreneurs who evaluate the same ambiguous prospects differently, with free entry and selection among entrants. Allowing many entrepreneurs to try in parallel improves selection and raises the expected value of successful innovation relative to centralized winner-picking, which strengthens research incentives. Relative to the Aghion–Howitt framework, policy implications change: commercialization-oriented instruments (milestone-based support, downside protection, faster intellectual property and regulatory processes, and institutions for decentralized experimentation) can dominate uniform R&amp;D wage subsidies, especially when ambiguity is high. Overall, the analysis shows that once commercialization is an endogenous entrepreneurial choice under ambiguity, the case for commercialization- and experimentation-oriented policy instruments strengthens in a Schumpeterian growth framework.</p>

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Entrepreneurship under ambiguity: extending Aghion and Howitt

  • 期刊论文

  • 发表日期：

    2026年3月6日

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  • Niclas Berggren

摘要

Entrepreneurs often must decide how much to invest in bringing an invention to market when neither the odds of commercialization success nor the risk of displacement by later innovations are known with certainty. To analyze this setting, we extend the Aghion–Howitt model of creative destruction by introducing an explicit entrepreneurial commercialization stage and allowing key probabilities to be ambiguous, in the sense that decision-makers cannot assign a unique probability distribution over a fixed and understood set of contingencies. In equilibrium, ambiguity shortens perceived rent horizons, curbs commercialization effort and research, and thereby reduces growth by lowering the rate at which research attempts are converted into frontier-raising innovations. We also extend the framework to heterogeneous entrepreneurs who evaluate the same ambiguous prospects differently, with free entry and selection among entrants. Allowing many entrepreneurs to try in parallel improves selection and raises the expected value of successful innovation relative to centralized winner-picking, which strengthens research incentives. Relative to the Aghion–Howitt framework, policy implications change: commercialization-oriented instruments (milestone-based support, downside protection, faster intellectual property and regulatory processes, and institutions for decentralized experimentation) can dominate uniform R&D wage subsidies, especially when ambiguity is high. Overall, the analysis shows that once commercialization is an endogenous entrepreneurial choice under ambiguity, the case for commercialization- and experimentation-oriented policy instruments strengthens in a Schumpeterian growth framework.