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Knowledge exchange, matching, and agglomeration

  • Berliant, Marcus
  • Reed III, Robert R.
  • Wang, Ping

Despite wide recognition of their significant role in explaining sustained growth and economic development, uncompensated knowledge spillovers have not yet been fully modeled with a microeconomic foundation. This paper illustrates the exchange of knowledge as well as its consequences for agglomerative activity in a general-equilibrium search-theoretic framework. Agents, possessing differentiated types of knowledge, search for partners to exchange ideas in order to improve production efficacy. Contrary to previous work, we demonstrate that a decentralized equilibrium may be under-populated or over-populated and under-selective or over-selective in knowledge exchange, compared to the social optimum.

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Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 60 (2006)
Issue (Month): 1 (July)
Pages: 69-95

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Handle: RePEc:eee:juecon:v:60:y:2006:i:1:p:69-95
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622905

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