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Knowledge Exchange, Matching, and Agglomeration

  • Marcus Berliant

    (Washington University in St. Louis)

  • Robert R. Reed III

    (University of Kentucky)

  • Ping Wang

    (Washington University in St. Louis)

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.

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File URL: http://128.118.178.162/eps/urb/papers/0506/0506013.pdf
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Paper provided by EconWPA in its series Urban/Regional with number 0506013.

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Length: 38 pages
Date of creation: 23 Jun 2005
Date of revision: 07 Jul 2005
Handle: RePEc:wpa:wuwpur:0506013
Note: Type of Document - pdf; pages: 38
Contact details of provider: Web page: http://128.118.178.162

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