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Knowledge Creation as a Square Dance on the Hilbert Cube

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  • Berliant, Marcus
  • Fujita, Masahisa

Abstract

This paper presents a micro-model of knowledge creation and transfer in a small group of people. Our model incorporates two key aspects of the cooperative process of knowledge creation: (i) heterogeneity of people in their state of knowledge is essential for successful cooperation in the joint creation of new ideas, while (ii) the very process of cooperative knowledge creation a¤ects the heterogeneity of people through the accumulation of knowledge in common. The model features myopic agents in a pure externality model of interaction. In the two person case, we show that the equilibrium process tends to result in the accumulation of too much knowledge in common compared to the most productive state. Unlike the two-person case, in the four person case we show that the equilibrium process of knowledge creation may converge to the most productive state. Equilibrium paths are found analytically, and they are a discontinuous function of initial heterogeneity.

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File URL: http://ir.ide.go.jp/dspace/bitstream/2344/192/3/ARRIDE_Discussion_No.14_Berliant.pdf
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Bibliographic Info

Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 14.

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Date of creation: Oct 2004
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Publication status: Published in IDE Discussion Paper. No. 14. 2004.10
Handle: RePEc:jet:dpaper:dpaper14

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Keywords: Knowledge Creation; Square Dance; Hilbert Cube; Heterogeneity; Microeconomics; Econometric model;

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References

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  1. FUJITA, Masahisa & WEBER, Shlomo, 2003. "Strategic immigration policies and welfare in heterogeneous countries," CORE Discussion Papers 2003095, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Gilles Duranton & Diego Puga, 2000. "Nursery Cities: Urban Diversity, Process Innovation and the Life-Cycle of Products," CEP Discussion Papers dp0445, Centre for Economic Performance, LSE.
  3. Ajay Agrawal & Iain Cockburn & John McHale, 2003. "Gone But Not Forgotten: Labor Flows, Knowledge Spillovers, and Enduring Social Capital," NBER Working Papers 9950, National Bureau of Economic Research, Inc.
  4. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  5. Jones, Larry E & Manuelli, Rodolfo E, 1990. "A Convex Model of Equilibrium Growth: Theory and Policy Implications," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1008-38, October.
  6. Berliant, Marcus & Fujita, Masahisa, 2007. "Dynamics of knowledge creation and transfer: The two person case," MPRA Paper 4973, University Library of Munich, Germany.
  7. Marcus Berliant, 2003. "Knowledge Exchange, Matching, and Agglomeration," Theory workshop papers 505798000000000026, UCLA Department of Economics.
  8. repec:cup:cbooks:9780521805247 is not listed on IDEAS
  9. Helsley, Robert W. & Strange, William C., 2004. "Knowledge barter in cities," Journal of Urban Economics, Elsevier, vol. 56(2), pages 327-345, September.
  10. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, April.
  11. Philip Auerswald & Stuart Kauffman & Jose Lobo & Karl Shell, 1998. "The Production Recipes Approach to Modeling Technological Innovation: An Application to Learning By Doing," Working Papers 98-11-100, Santa Fe Institute.
  12. Aoki, Masahiko, 1994. "The Contingent Governance of Teams: Analysis of Institutional Complementarity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(3), pages 657-76, August.
  13. Jovanovic, Boyan & Rob, Rafael, 1989. "The Growth and Diffusion of Knowledge," Review of Economic Studies, Wiley Blackwell, vol. 56(4), pages 569-82, October.
  14. repec:cup:cbooks:9780521801386 is not listed on IDEAS
  15. Keely,L.C., 2002. "Exchanging good ideas," Working papers 14, Wisconsin Madison - Social Systems.
  16. Keely, Louise C., 2003. "Exchanging good ideas," Journal of Economic Theory, Elsevier, vol. 111(2), pages 192-213, August.
  17. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  18. Michele Boldrin & David K Levine, 2008. "Against Intellectual Monopoly," Levine's Bibliography 122247000000002371, UCLA Department of Economics.
  19. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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