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Knowledge Creation as a Square Dance on the Hilbert Cube

Marcus Berliant () and Masahisa Fujita

Game Theory and Information from EconWPA

Abstract: This paper presents a micro-model of knowledge creation through the interactions among a group of people. Our model incorporates two key aspects of the cooperative process of knowledge creation: (i) heterogeneity of people in their state of knowledge is essential for successful cooperation in the joint creation of new ideas, while (ii) the very process of cooperative knowledge creation affects the heterogeneity of people through the accumulation of knowledge in common. The model features myopic agents in a pure externality model of interaction. Surprisingly, in the general case 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 the heterogeneity of knowledge is more important in the knowledge production process. Equilibrium paths are found analytically, and they are a discontinuous function of initial heterogeneity.

Keywords: knowledge creation; knowledge externalities; microfoundations of endogenous growth (search for similar items in EconPapers)
JEL-codes: D83 O31 R11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo
Date: 2005-06-22, Revised 2005-09-26
Note: Type of Document - pdf; pages: 64
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http://econwpa.repec.org/eps/game/papers/0506/0506006.pdf (application/pdf)

Related works:
Journal Article: KNOWLEDGE CREATION AS A SQUARE DANCE ON THE HILBERT CUBE (2008) Downloads
Working Paper: Knowledge creation as a square dance on the Hilbert cube (2007) Downloads
Working Paper: Knowledge Creation as a Square Dance on the Hilbert Cube (2005) Downloads
Working Paper: Knowledge Creation as a Square Dance on the Hilbert Cube (2004) Downloads
Working Paper: Knowledge Creation as a Square Dance on the Hilbert Cube (2004) Downloads
Working Paper: Knowledge Creation as a Square Dance on the Hilbert Cube (2004)
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