 The derived demand for knowledgeEconomics of Innovation and New Technology, 2017, vol. 26, issue 1-2, 183-194 Abstract: This paper calls attention on the effects of the economic properties of knowledge on its derived demand, an issue that has not received enough attention in the literature. The results of the analysis suggests that, because of the idiosyncratic – Arrovian – properties of knowledge, a chain of effects takes place: (i) in downstream markets the price of goods that have been produced using knowledge as an intermediate good, falls, (ii) consequently the derived demand in upstream knowledge markets – both within corporations and by them to knowledge-intensive business services – has a lower position, and (iii) the price of knowledge is lower than it should be were knowledge a standard good traded in competitive markets, (iv) with negative consequences in terms of adverse selection of large scale high quality research projects, but (v) possible compensating effects stemming from the use of knowledge spillovers to generate cheaper knowledge. Such results have important implications for economic policy discussions and decisions. Date: 2017 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:ecinnt:v:26:y:2017:i:1-2:p:183-194 Ordering information: This journal article can be ordered from DOI: 10.1080/10438599.2016.1202518 Access Statistics for this article Economics of Innovation and New Technology is currently edited by Professor Cristiano Antonelli More articles in Economics of Innovation and New Technology from Taylor & Francis Journals |
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