KNOWLEDGE CREATION AS A SQUARE DANCE ON THE HILBERT CUBE

Marcus Berliant and Masahisa Fujita

International Economic Review, 2008, vol. 49, issue 4, 1251-1295

Abstract: This article presents a micromodel of knowledge creation through the interactions among a group of people. The model features myopic agents in a pure externality model of interaction. Surprisingly, for a large set of initial conditions we find that the equilibrium process of knowledge creation converges to the most productive state, where the population splits into smaller groups of optimal size; close interaction takes place within each group only. This optimal size is larger as heterogeneity of knowledge is more important in the knowledge production process. Equilibrium paths are found analytically; they are a discontinuous function of initial heterogeneity. Copyright © (2008) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 2008
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Related works:
Working Paper: Knowledge creation as a square dance on the Hilbert cube (2007)
Working Paper: Knowledge Creation as a Square Dance on the Hilbert Cube (2005)
Working Paper: Knowledge Creation as a Square Dance on the Hilbert Cube (2005)
Working Paper: Knowledge Creation as a Square Dance on the Hilbert Cube (2004)
Working Paper: Knowledge Creation as a Square Dance on the Hilbert Cube (2004)
Working Paper: Knowledge Creation as a Square Dance on the Hilbert Cube (2004)
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