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Knowledge Exchange, Matching, and Agglomeration

Author

Listed:
  • Marcus Berliant

    (Washington University in St. Louis)

  • Robert R. Reed III

    (University of Kentucky)

  • Ping Wang

    (Washington University in St. Louis)

Abstract

Despite wide recognition of their significant role in explaining sustained growth and economic development, uncompensated knowledge spillovers have not yet been fully modeled with a microeconomic foundation. This paper illustrates the exchange of knowledge as well as its consequences for agglomerative activity in a general-equilibrium search-theoretic framework. Agents, possessing differentiated types of knowledge, search for partners to exchange ideas in order to improve production efficacy. Contrary to previous work, we demonstrate that a decentralized equilibrium may be under-populated or over-populated and under-selective or over-selective in knowledge exchange, compared to the social optimum.

Suggested Citation

  • Marcus Berliant & Robert R. Reed III & Ping Wang, 2005. "Knowledge Exchange, Matching, and Agglomeration," Urban/Regional 0506013, EconWPA, revised 31 Jan 2006.
  • Handle: RePEc:wpa:wuwpur:0506013
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    matching; knowledge exchange and spillovers; agglomerative activity;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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