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Knowledge Creation as a Square Dance on the Hilbert Cube

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  • Masahisa Fujita
  • Marcus Berliant

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

Suggested Citation

  • Masahisa Fujita & Marcus Berliant, 2004. "Knowledge Creation as a Square Dance on the Hilbert Cube," Econometric Society 2004 North American Summer Meetings 204, Econometric Society.
  • Handle: RePEc:ecm:nasm04:204
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    References listed on IDEAS

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    More about this item

    Keywords

    knowledge creation; knowledge transfer; knowledge externalities; microfoundations of endogenous growth;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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