Competing lines of research start, grow, and end, as information is gradually uncovered by researchers who, driven by career incentives, sort themselves into fields. In this paper, using a strategic experimentation framework in which agents irreversibly specialise in one of two risky fields, we describe the equilibrium forces that determine the size, shape, and length of such "research waves." We show that when information updates arrive through breakdowns ("bad news") in equilibrium all researchers specialise in one field, generating a unique "bandwagon" wave. As the difference in priors increases, such wave starts earlier, grows more slowly, and becomes longer. When information updates arrive as breakthroughs ("good news") in equilibrium both field are explored if the pool of researchers is large enough. We compare the equilibrium outcomes with two alternative benchmarks: the researchers' utilitarian perspective, as well as a "societal welfare" which accounts for the wider social benefits generated by research. In addition, we evaluate the impact of factors that influence researchers' careers, such as citations' counts, on the equilibrium waves and their welfare properties, and how institutions can influence equilibrium outcomes through the design of appropriate career incentives.
Co-authors: Mariagiovanna Baccara and Ronny Razin