NET PRESENT VALUE TECHNIQUES AND THEIR EFFECTS ON NEW PRODUCT RESEARCH

This article presents an exploratory analysis of the effects of emphas izing net present value techniques and short-term returns in the analy sis and selection of new product research projects. A large body of li terature exists in economics indicating that such emphases hinder succ essful innovation, yet the authors usually argue from anecdotal and ca se-generated data. We present empirical results that lend support to t he aforementioned criticisms of net present value techniques and the s hort-term biases that they reflect.