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Knowledge Accumulation within an Organization

  • Ngo Van Long
  • Antoine Soubeyran
  • Raphael Soubeyran

We develop a simple model of task allocation for knowledge workers over their career within an organization. The human capital theory initiated by Becker (1962, 1964) has o¤ered a rich analysis of an individuals life cycle investment in human capital. One of the main result of this literature states that human capital investments are undertaken at the early stage of the career because workers have then a longer period of time over which they can bene t from the return of their investments. In this paper, we consider a knowledge accumulation problem within an organization that cannot prevent the worker from quitting and using the knowledge outside the organization. In the rst best situation, we show a similar result as in the human capital theory, i.e. the share of time allocated to knowledge creation tasks decreases over time. We then ask how this pattern is a¤ected when the knowledge worker can leave the organization and bene t from this knowledge outside the organization. In this case, we obtain the novel result that the time path of the fraction of working time allocated to knowledge creation tasks is non-monotone. This fraction is highest at the early career stage, falls gradually, then rises again, before falling nally toward zero. We also show that an increase in the rm-speci city of knowledge can increase or decrease the life-time income of the knowledge worker.

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Paper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 12-03.

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Length: 30 pages
Date of creation: Jan 2012
Date of revision: Jan 2012
Handle: RePEc:lam:wpaper:12-03
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  1. Hart, Oliver D. & Moore, John, 1990. "Property Rights and the Nature of the Firm," Scholarly Articles 3448675, Harvard University Department of Economics.
  2. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Scholarly Articles 4554125, Harvard University Department of Economics.
  3. Mathias Dewatripont & Patrick Legros & Steven A. Matthews, 2003. "Moral Hazard and Capital Structure Dynamics," PIER Working Paper Archive 03-006, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  4. Smirnov, V. & Wait, A., 2001. "Timing of Investments, Hold-up and Total Welfare," Department of Economics - Working Papers Series 808, The University of Melbourne.
  5. Leonardo Felli & Kevin Roberts, 2011. "Does Competition Solve the Hold-up Problem?," STICERD - Theoretical Economics Paper Series 561, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  6. Sergei Guriev & Dmitriy Kvasov, 2005. "Contracting on Time," Sciences Po publications info:hdl:2441/4et5cqo2b89, Sciences Po.
  7. Pitchford, Rohan & Snyder, Christopher M., 2004. "A solution to the hold-up problem involving gradual investment," Journal of Economic Theory, Elsevier, vol. 114(1), pages 88-103, January.
  8. Hvide, Hans K. & Kristiansen, Eirik G., 2006. "Management of Knowledge Workers," Discussion Papers 2006/7, Department of Business and Management Science, Norwegian School of Economics.
  9. Tai-Yeong Chung, 1991. "Incomplete Contracts, Specific Investments, and Risk Sharing," Review of Economic Studies, Oxford University Press, vol. 58(5), pages 1031-1042.
  10. Léonard,Daniel & Long,Ngo van, 1992. "Optimal Control Theory and Static Optimization in Economics," Cambridge Books, Cambridge University Press, number 9780521337465, September.
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