IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/1687.html
   My bibliography  Save this paper

The value of a new idea: knowledge transmission, workers' mobility and market structure

Author

Listed:
  • Marini, Marco A.

Abstract

We model the process of knowledge transmission among firms via workers mobility as a multi-stage game. In our setup an idea to be realized needs that the agent informed about the idea recruits another agent from a pool of uninformed people. This constraint generates a recursive effect of knowledge transmission via players mobility across firms which affects simultaneously the players payoffs and the number of active players engaged in market competition. We provide sufficient conditions for the game to possess a unique symmetric subgame perfect equilibrium in which all incumbent players deter the exit of their collaborators. The equilibrium outcome is shown to depend upon the success of the idea over time, expressed by the behaviour of the market demand and on playerstime preferences. A few other intuitions are provided on the interplay between technology, market structure and the market value of an innovative idea.

Suggested Citation

  • Marini, Marco A., 2005. "The value of a new idea: knowledge transmission, workers' mobility and market structure," MPRA Paper 1687, University Library of Munich, Germany, revised Jan 2006.
  • Handle: RePEc:pra:mprapa:1687
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/1687/1/MPRA_paper_1687.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Raghuram G. Rajan & Luigi Zingales, 2001. "The Firm as a Dedicated Hierarchy: A Theory of the Origins and Growth of Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 805-851.
    2. Bruno Biais & Enrico Perotti, 2008. "Entrepreneurs and new ideas," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 1105-1125.
    3. Pakes, Ariel & Nitzan, Shmuel, 1983. "Optimum Contracts for Research Personnel, Research Employment, and the Establishment of "Rival" Enterprises," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 345-365, October.
    4. Stanley M. Besen & Leo J. Raskind, 1991. "An Introduction to the Law and Economics of Intellectual Property," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 3-27, Winter.
    5. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters,in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
    6. Cooper, David P., 2001. "Innovation and reciprocal externalities: information transmission via job mobility," Journal of Economic Behavior & Organization, Elsevier, vol. 45(4), pages 403-425, August.
    7. Mariagiovanna Baccara & Ronny Razin, 2003. "From Thought to Practice: Appropriation and Endogenous Market Structure with Imperfect Intellectual Property Rights," Working Papers 03-11, New York University, Leonard N. Stern School of Business, Department of Economics.
    8. Stole, Lars A & Zwiebel, Jeffrey, 1996. "Organizational Design and Technology Choice under Intrafirm Bargaining," American Economic Review, American Economic Association, vol. 86(1), pages 195-222, March.
    9. MacLeod, W Bentley & Malcomson, James M, 1988. "Reputation and Hierarchy in Dynamic Models of Employment," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 832-854, August.
    10. Lars A. Stole & Jeffrey Zwiebel, 1996. "Intra-firm Bargaining under Non-binding Contracts," Review of Economic Studies, Oxford University Press, vol. 63(3), pages 375-410.
    11. Asher Wolinsky, 2000. "A Theory of the Firm with Non-Binding Employment Contracts," Econometrica, Econometric Society, vol. 68(4), pages 875-910, July.
    12. Feinstein, Jonathan S. & Stein, Jeremy, 1988. "Employee opportunism and redundancy in firms," Journal of Economic Behavior & Organization, Elsevier, vol. 10(4), pages 401-414, December.
    13. J·n Z·bojnÌk, 2002. "A Theory of Trade Secrets in Firms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 831-855, August.
    14. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1988. "Appropriating the Returns from Industrial R&D," Cowles Foundation Discussion Papers 862, Cowles Foundation for Research in Economics, Yale University.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marini, Marco A., 1998. "Earnings, Coalitions and the Stability of the Firm," MPRA Paper 70728, University Library of Munich, Germany, revised 2012.

    More about this item

    Keywords

    Innovation; Workers’ Mobility; Knowledge Transmission; Subgame Perfect Nash Equilibrium; Recursive Games;

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:1687. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.