A Game Theoretic Analysis of the Conditions of Knowledge Transfer by New Employees in Companies
AbstractThe availability of knowledge is an essential factor for an economy in global competition. Companies realise innovations by creating and implementing new knowledge. Sources of innovative ideas are partners in the production network but also new employees coming from another company or academia. Based on a model by HECKATHORN (1996) the conditions of efficient knowledge transfer in a team are analysed. Offering knowledge to a colleague can not be controlled directly by the company due to information asymmetries. Thus the management has to provide incentives which motivate the employees to act in favour of the company by providing their knowledge to the rest of the team and likewise to learn from colleagues. The game theoretic analysis aims at investigating how to arrange these incentives efficiently. Several factors are relevant, especially the individual costs of participating in the transfer. These consist mainly of the existing absorptive capacity and the working atmosphere. The model is a 2x2 game but is at least partly generalised on more players. The relevance of the adequate team size is shown: more developers may increase the total profit of an innovation (before paying the involved people) but when additional wages are paid to each person a greater team decreases the remaining company profit. A further result is that depending on the cost structure perfect knowledge transfer is not always best for the profit of the company. These formal results are consistent with empirical studies to the absorptive capacity and the working atmosphere.
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Bibliographic InfoPaper provided by Halle Institute for Economic Research in its series IWH Discussion Papers with number 3.
Date of creation: Mar 2006
Date of revision:
knowledge transfer; innovation; game theory; absorptive capacity;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-08 (All new papers)
- NEP-BEC-2006-04-08 (Business Economics)
- NEP-INO-2006-04-08 (Innovation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Peter J Buckley & Martin J Carter, 2004. "A formal analysis of knowledge combination in multinational enterprises," Journal of International Business Studies, Palgrave Macmillan, vol. 35(5), pages 371-384, September.
- Charles Dhanaraj & Marjorie A Lyles & H Kevin Steensma & Laszlo Tihanyi, 2004. "Managing tacit and explicit knowledge transfer in IJVs: the role of relational embeddedness and the impact on performance," Journal of International Business Studies, Palgrave Macmillan, vol. 35(5), pages 428-442, September.
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