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On optimal regimes of knowledge exchange: a model of recombinant growth and firm networks

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  • Ivan Savin

    (Universitat Autónoma de Barcelona
    Ural Federal University)

Abstract

The literature has documented two patterns of knowledge exchange: free sharing of knowledge and barter exchange. The former has been coined as collective invention, while the latter is observed in the form of R&D alliance. This study, for the first time, compares these two modes of cooperation in creating and diffusing new knowledge. Doing so, we take seriously the network character of knowledge and the skewed distribution of innovation size by proposing a novel model. In this model, knowledge is represented by distinct letters and words constructed thereof and accumulated by agents over time. Discovering new words agents recombine available knowledge pieces not randomly but following certain ideas, semi-definite structures on what words can be further constructed. We proceed by allocating agents in a network and allowing them to cooperate over direct ties either in a regime of collective invention or bilateral R&D alliances. We find networks with skewed degree distribution as most productive under R&D alliances and perfect IPR since they best concentrate scarce resources in discovering different knowledge combinations. In contrast, under collective invention and imperfect IPR, clustered networks better diffuse valuable ideas and knowledge resulting in the overall superior performance. Furthermore, under imperfect IPR, collective invention raises the inequality in payoffs among agents in networks with skewed degree distribution but reduces it for clustered topologies. The latter brings a novel explanation on why industries in the past have experienced a shift in the dominant pattern of knowledge exchange.

Suggested Citation

  • Ivan Savin, 2021. "On optimal regimes of knowledge exchange: a model of recombinant growth and firm networks," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 16(3), pages 497-527, July.
    • Handle: RePEc:spr:jeicoo:v:16:y:2021:i:3:d:10.1007_s11403-020-00314-1
    DOI: 10.1007/s11403-020-00314-1
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    More about this item

    Keywords

    Collective invention; Discovery; Intellectual property rights; Knowledge space; Networks; R&D alliance;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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