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The Impact of Connectivity on the Production and Diffusion of Knowledge

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  • Gustavo Manso
  • Farzad Pourbabaee

Abstract

We study a social bandit problem featuring production and diffusion of knowledge. While higher connectivity enhances knowledge diffusion, it may reduce knowledge production as agents shy away from experimentation with new ideas and free ride on the observation of other agents. As a result, under some conditions, greater connectivity can lead to homogeneity and lower social welfare.

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  • Gustavo Manso & Farzad Pourbabaee, 2022. "The Impact of Connectivity on the Production and Diffusion of Knowledge," Papers 2202.00729, arXiv.org.
    • Handle: RePEc:arx:papers:2202.00729
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