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Knowledge Creation as a Square Dance on the Hilbert Cube

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  • Marcus Berliant

    (Department of Economics, Washington University)

  • Masahisa Fujita

    (Institute of Economic Research, Kyoto University)

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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Bibliographic 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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Keywords: knowledge creation; knowledge transfer; knowledge externalities; microfoundations of endogenous growth;

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References

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  1. Berliant, Marcus & Fujita, Masahisa, 2007. "Dynamics of knowledge creation and transfer: The two person case," MPRA Paper 4973, University Library of Munich, Germany.
  2. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  3. Marcus Berliant & Robert R. Reed III & Ping Wang, 2000. "Knowledge Exchange, Matching, and Agglomeration," Vanderbilt University Department of Economics Working Papers 0033, Vanderbilt University Department of Economics.
  4. 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.
  5. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411.
  6. repec:cup:cbooks:9780521801386 is not listed on IDEAS
  7. Keely,L.C., 2002. "Exchanging good ideas," Working papers 14, Wisconsin Madison - Social Systems.
  8. 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.
  9. Michele Boldrin & David K Levine, 2008. "Against Intellectual Monopoly," Levine's Bibliography 122247000000002371, UCLA Department of Economics.
  10. Gilles Duranton & Diego Puga, 2000. "Nursery Cities: Urban diversity, process innovation, and the life-cycle of products," Working Papers dpuga-00-01, University of Toronto, Department of Economics.
  11. Masahisa Fujita & Shlomo Weber, 2003. "Strategic Immigration Policies and Welfare in Heterogeneous Countries," KIER Working Papers 569, Kyoto University, Institute of Economic Research.
  12. repec:cup:cbooks:9780521805247 is not listed on IDEAS
  13. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  14. 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.
  15. 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.
  16. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  17. Jovanovic, Boyan & Rob, Rafael, 1989. "The Growth and Diffusion of Knowledge," Review of Economic Studies, Wiley Blackwell, vol. 56(4), pages 569-82, October.
  18. Helsley, Robert W. & Strange, William C., 2004. "Knowledge barter in cities," Journal of Urban Economics, Elsevier, vol. 56(2), pages 327-345, September.
  19. Keely, Louise C., 2003. "Exchanging good ideas," Journal of Economic Theory, Elsevier, vol. 111(2), pages 192-213, August.
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