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Knowledge Creation as a Square Dance on the Hilbert Cube

Author

Listed:
  • Marcus Berliant

    (Washington University in St. Louis)

  • Masahisa Fujita

    (Institute of Economic Research, Kyoto University)

Abstract

This paper presents a micro-model of knowledge creation and transfer in a small group of people. 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 the equilibrium process of knowledge creation may converge to the most productive state. Equilibrium paths are found analytically, and they are a discontinuous function of initial heterogeneity.

Suggested Citation

  • Marcus Berliant & Masahisa Fujita, 2004. "Knowledge Creation as a Square Dance on the Hilbert Cube," Game Theory and Information 0401004, University Library of Munich, Germany, revised 17 Apr 2005.
  • Handle: RePEc:wpa:wuwpga:0401004
    Note: Type of Document - pdf; prepared on WinXP; to print on hplaserjet1300; pages: 70; figures: 9
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    References listed on IDEAS

    as
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    2. Gilles Duranton & Diego Puga, 2001. "Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products," American Economic Review, American Economic Association, vol. 91(5), pages 1454-1477, December.
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    4. Keely, Louise C., 2003. "Exchanging good ideas," Journal of Economic Theory, Elsevier, vol. 111(2), pages 192-213, August.
    5. Masahiko Aoki, 2013. "The Contingent Governance Of Teams: Analysis Of Institutional Complementarity," Chapters,in: Comparative Institutional Analysis, chapter 14, pages 230-249 Edward Elgar Publishing.
    6. Marcus Berliant & Masahisa Fujita, 2009. "Dynamics of knowledge creation and transfer: The two person case," International Journal of Economic Theory, The International Society for Economic Theory, vol. 5(2), pages 155-179.
    7. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
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    9. Boldrin,Michele & Levine,David K., 2010. "Against Intellectual Monopoly," Cambridge Books, Cambridge University Press, number 9780521127264, January.
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    12. Jones, Larry E & Manuelli, Rodolfo E, 1990. "A Convex Model of Equilibrium Growth: Theory and Policy Implications," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1008-1038, October.
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    More about this item

    Keywords

    knowledge creation; knowledge transfer; knowledge externalities; microfoundations of endogenous growth;

    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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