Evaluators systematically misconstrued ideas that were outside their established paradigms,” he said. This “bounded rationality” was the most convincing reason for why assessors failed to appreciate highly novel plans, according to the paper, “Looking across and looking beyond the knowledge frontier: intellectual distance, novelty, and resource allocation in science”, published in Management Science.
Novelty was measured using keywords in each proposal. If two keywords rarely appeared together in the existing literature, an idea was considered novel.
The findings have implications well beyond academia, Professor Riedl said.
“We think that the findings generalise to…pretty much any field where we evaluate how to allocate our money,” including companies looking to develop new products, start-ups looking for investment or publishers reading manuscripts of new books, he argued.
The current economy is “systematically underinvesting in new ideas”, he said. (Source)