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Knowledge Creation as a Square Dance on the Hilbert Cube

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Author Info
Marcus Berliant (Department of Economics, Washington University)
Masahisa Fujita (Institute of Economic Research, Kyoto University)

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Abstract

This paper presents a micro-model of knowledge creation and transfer in a small group of people. It is intended to contribute eventually to the development of microfoundations for aggregate models of knowledge externalities used in various literatures, such as those pertaining to endogenous growth theory, urban agglomeration and growth, organizational R&D and knowledge creation, and human capital accumulation. 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 affects the heterogeneity of people through the accumulation of knowledge in common. 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 under certain conditions, the equilibrium process of knowledge creation by four persons may converge to the most productive state. Extensions of the basic model are discussed.

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Publisher Info
Paper provided by Kyoto University, Institute of Economic Research in its series KIER Working Papers with number 580.

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Length: 65 pages
Date of creation: Jan 2004
Date of revision:
Handle: RePEc:kyo:wpaper:580

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Related research
Keywords: knowledge creation; knowledge transfer; knowledge externalities; microfoundations of endogenous growth;

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Find related papers by JEL classification:
D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes

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  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October. [Downloadable!] (restricted)
  2. Gilles Duranton & Diego Puga, 2001. "Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products," American Economic Review, American Economic Association, vol. 91(5), pages 1454-1477, December. [Downloadable!] (restricted)
    Other versions:
  3. 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. [Downloadable!] (restricted)
  4. Helsley, Robert W. & Strange, William C., 2004. "Knowledge barter in cities," Journal of Urban Economics, Elsevier, vol. 56(2), pages 327-345, September. [Downloadable!] (restricted)
  5. 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. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
  7. Masahisa Fujita & Shlomo Weber, 2003. "Strategic Immigration Policies and Welfare in Heterogeneous Countries," KIER Working Papers 569, Kyoto University, Institute of Economic Research.
  8. Keely, Louise C., 2003. "Exchanging good ideas," Journal of Economic Theory, Elsevier, vol. 111(2), pages 192-213, August. [Downloadable!] (restricted)
  9. repec:att:wimass:1920214 is not listed on IDEAS
  10. Kirman, Alan, 2007. "Introduction," Macroeconomic Dynamics, Cambridge University Press, vol. 11(S1), pages 1-7, November. [Downloadable!]
  11. Berliant, Marcus & Fujita, Masahisa, 2007. "Dynamics of knowledge creation and transfer: The two person case," MPRA Paper 4973, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  12. 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). [Downloadable!]
  13. Marcus Berliant & Robert R. Reed III & Ping Wang, 2004. "Knowledge Exchange, Matching, and Agglomeration," Urban/Regional 0405007, EconWPA, revised 03 Dec 2004. [Downloadable!]
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  14. Fujita, Masahisa & Thisse, Jacques-François, 1996. "Economics of Agglomeration," CEPR Discussion Papers 1344, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  15. Jovanovic, Boyan & Rob, Rafael, 1989. "The Growth and Diffusion of Knowledge," Review of Economic Studies, Blackwell Publishing, vol. 56(4), pages 569-82, October. [Downloadable!] (restricted)
  16. Michele Boldrin & David K Levine, 2008. "Against Intellectual Monopoly," Levine's Bibliography 122247000000002371, UCLA Department of Economics. [Downloadable!]
  17. Auerswald, Philip & Kauffman, Stuart & Lobo, Jose & Shell, Karl, 2000. "The production recipes approach to modeling technological innovation: An application to learning by doing," Journal of Economic Dynamics and Control, Elsevier, vol. 24(3), pages 389-450, March. [Downloadable!] (restricted)
    Other versions:
  18. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn. [Downloadable!] (restricted)
  19. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
    Other versions:
  20. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Ottaviano, Gianmarco I.P. & Peri, Giovanni, 2004. "The Economic Value of Cultural Diversity: Evidence from US Cities," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  2. Gianmarco I.P. Ottaviano & Giovanni Peri, 2004. "Cities and Cultures," Working Papers 2004.92, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  3. Berliant, Marcus & Fujita, Masahisa, 2008. "The Dynamics of Knowledge Diversity and Economic Growth," MPRA Paper 7088, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  4. Annekatrin Niebuhr, 2006. "Migration and Innovation - Does Cultural Diversity Matter for Regional R&D Activity?," ERSA conference papers ersa06p31, European Regional Science Association. [Downloadable!]
  5. Marcus Berliant & Ping Wang, 2004. "Dynamic Urban Models: Agglomeration and Growth," Urban/Regional 0404006, EconWPA. [Downloadable!]
    Other versions:
  6. Berliant, Marcus & Fujita, Masahisa, 2007. "Dynamics of knowledge creation and transfer: The two person case," MPRA Paper 4973, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  7. Niebuhr, Annekatrin, 2006. "Migration and innovation : does cultural diversity matter for regional R&D activity?," IAB Discussion Paper 200614, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
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