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A Game Theoretic Analysis of the Conditions of Knowledge Transfer by New Employees in Companies

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  • von Ledebur, Sidonia

Abstract

The availability of knowledge is an essential factor for an economy in global competition. Companies realise innovations by creating and implementing new knowledge. Sources of innovative ideas are partners in the production network but also new employees coming from another company or academia. Based on a model by HECKATHORN (1996) the conditions of efficient knowledge transfer in a team are analysed. Offering knowledge to a colleague can not be controlled directly by the company due to information asymmetries. Thus the management has to provide incentives which motivate the employees to act in favour of the company by providing their knowledge to the rest of the team and likewise to learn from colleagues. The game theoretic analysis aims at investigating how to arrange these incentives efficiently. Several factors are relevant, especially the individual costs of participating in the transfer. These consist mainly of the existing absorptive capacity and the working atmosphere. The model is a 2x2 game but is at least partly generalised on more players. The relevance of the adequate team size is shown: more developers may increase the total profit of an innovation (before paying the involved people) but when additional wages are paid to each person a greater team decreases the remaining company profit. A further result is that depending on the cost structure perfect knowledge transfer is not always best for the profit of the company. These formal results are consistent with empirical studies to the absorptive capacity and the working atmosphere.

Suggested Citation

  • von Ledebur, Sidonia, 2006. "A Game Theoretic Analysis of the Conditions of Knowledge Transfer by New Employees in Companies," IWH Discussion Papers 3/2006, Halle Institute for Economic Research (IWH).
    • Handle: RePEc:zbw:iwhdps:iwh-3-06
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Wissenstransfer; Innovation; Spieltheorie; Absorptionsvermögen; Knowledge Transfer; Innovation; Game Theory; Absorptive Capacity;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • 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

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