Abstract
Incremental innovations appears to be much more frequent than radical innovations. Possible explanations rely on the effect of the degree of competition in the market. The paper, on the contrary, focuses on agents' attitude towards status quo and con- servativeness and specifies the conditions where the preference for incremental innovations represents an optimum. In fact, the welfare generated by radical innovations drops dramatically when agents are uncertainty-averse and/or loss-averse.
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