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Knowledge creation as a square dance on the Hilbert cube

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Author Info
Berliant, Marcus
Fujita, Masahisa

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Abstract

This paper presents a micro-model of knowledge creation through the interactions among a 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 affects the heterogeneity of people through the accumulation of knowledge in common. The model features myopic agents in a pure externality model of interaction. Surprisingly, in the general case for a large set of initial conditions we find that the equilibrium process of knowledge creation converges to the most productive state, where the population splits into smaller groups of optimal size; close interaction takes place within each group only. This optimal size is larger as the heterogeneity of knowledge is more important in the knowledge production process. Equilibrium paths are found analytically, and they are a discontinuous function of initial heterogeneity.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 2884.

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Date of creation: 01 Sep 2007
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Handle: RePEc:pra:mprapa:2884

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Related research
Keywords: knowledge creation; knowledge externalities; dynamic R and D; endogenous agent heterogeneity;

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Find related papers by JEL classification:
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information

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References listed on IDEAS
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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)
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  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. [Downloadable!] (restricted)
  4. 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)
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  8. Michele Boldrin & David K Levine, 2008. "Against Intellectual Monopoly," Levine's Bibliography 122247000000002371, UCLA Department of Economics. [Downloadable!]
  9. 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)
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  10. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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  11. 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)
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  13. Masahisa Fujita & Shlomo Weber, 2003. "Strategic Immigration Policies and Welfare in Heterogeneous Countries," KIER Working Papers 569, Kyoto University, Institute of Economic Research.
  14. repec:att:wimass:1920214 is not listed on IDEAS
  15. Berliant, Marcus & Fujita, Masahisa, 2007. "Dynamics of knowledge creation and transfer: The two person case," MPRA Paper 4973, University Library of Munich, Germany. [Downloadable!]
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  16. 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!]
  17. 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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  18. Fujita, Masahisa & Thisse, Jacques-François, 1996. "Economics of Agglomeration," CEPR Discussion Papers 1344, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  19. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn. [Downloadable!] (restricted)
  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)
Full references

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. Berliant, Marcus & Fujita, Masahisa, 2008. "The Dynamics of Knowledge Diversity and Economic Growth," MPRA Paper 7088, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  2. Marcus Berliant & Ping Wang, 2004. "Dynamic Urban Models: Agglomeration and Growth," Urban/Regional 0404006, EconWPA. [Downloadable!]
    Other versions:
  3. GianMarco Ottaviano & Giovanni Peri, 2004. "The Economic Value of Cultural Diversity: Evidence from US cities," Econometric Society 2004 North American Summer Meetings 91, Econometric Society. [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. Gianmarco I.P. Ottaviano & Giovanni Peri, 2004. "Cities and Cultures," Working Papers 2004.92, Fondazione Eni Enrico Mattei. [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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