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Self-Organizing Innovation Networks: When do Small Worlds Emerge?

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  • Nicolas CARAYOL (BETA)
  • Pascale ROUX (GRES-LEREPS)

Abstract

In this paper, we present a model of 'collective innovation' built upon the network formation formalism. In our model, agents localized on a circle benefit from knowledge flows from other agents with whom they are directly or indirectly connected. They support costs for direct connections which are linearly increasing with geographic distance. The dynamic process of network formation exhibits prefeRential meeting for close agents (in the relational network and in the geographic metrics). We show how the set of stochastically stable networks selected in the long run is affected by the degree of knowledge transferability. We find critical values of this parameter for which stable \"small world\" networks are dynamically selected.

Suggested Citation

  • Nicolas CARAYOL (BETA) & Pascale ROUX (GRES-LEREPS), 2003. "Self-Organizing Innovation Networks: When do Small Worlds Emerge?," Cahiers du GRES (2002-2009) 2003-08, Groupement de Recherches Economiques et Sociales.
  • Handle: RePEc:grs:wpegrs:2003-08
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    References listed on IDEAS

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    1. M. E. J. Newman, 2001. "Clustering and Preferential Attachment in Growing Networks," Working Papers 01-03-021, Santa Fe Institute.
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    4. Dasgupta, Partha & Stiglitz, Joseph, 1980. "Industrial Structure and the Nature of Innovative Activity," Economic Journal, Royal Economic Society, vol. 90(358), pages 266-293, June.
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    8. Allen, Robert C., 1983. "Collective invention," Journal of Economic Behavior & Organization, Elsevier, vol. 4(1), pages 1-24, March.
    9. Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January.
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    14. Reinganum, Jennifer F., 1989. "The timing of innovation: Research, development, and diffusion," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 14, pages 849-908 Elsevier.
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    Cited by:

    1. Duarte Leite & Pedro Campos & Isabel Mota, 2011. "Computational Results on Membership in R&D Cooperation Networks: To Be or Not To Be in a Research Joint Venture," FEP Working Papers 420, Universidade do Porto, Faculdade de Economia do Porto.
    2. Barr, Tavis & Roy, Udayan, 2008. "The effect of labor market monopsony on economic growth," Journal of Macroeconomics, Elsevier, vol. 30(4), pages 1446-1467, December.
    3. Zhou, Wen & Koptyug, Nikita & Ye, Shutao & Jia, Yifan & Lu, Xiaolong, 2015. "An Extended N-player Network Game and Simulation of Four Investment Strategies on a Complex Innovation Network," Working Paper Series 1097, Research Institute of Industrial Economics.
    4. Cowan, Robin, 2004. "Network models of innovation and knowledge diffusion," Research Memorandum 016, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).

    More about this item

    Keywords

    Network Formation; Stochastic Stability; Preferential Meeting; Self-Organization;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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