Inter-firm knowledge diffusion, market power, and welfare
Data(s) |
01/11/2012
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Resumo |
We propose an infinite-horizon quantity-setting differential game with learning spillovers and organizational forgetting to analyze the optimal management decisions affecting the evolution of the stock of know-how, and, in turn, the dynamics of productive efficiency. Specifically, we study the long run impact of inter-firm knowledge diffusion on market power, i.e. the ability of a firm to raise the price above the marginal cost, and welfare. We consider two types of processes through which knowledge is acquired: (i) passive learning, or learning-by-doing, where managers do not actively invest in information and (ii) active learning, or learning-by-investing, where managers acquire new and additional information through specific investments in human capital. We show that: under (i), knowledge diffusion reduces market power; under (ii), knowledge diffusion reduces market power as long as learning spillovers are sufficiently important. From a welfare viewpoint, we also show that: under (i), knowledge diffusion is always welfare-enhancing; under (ii), weak spillovers are required in order for knowledge diffusion to be welfare-enhancing.<br /> |
Identificador | |
Idioma(s) |
eng |
Publicador |
Springer |
Relação |
http://dro.deakin.edu.au/eserv/DU:30049965/colombo-interfirmknowledge-2012.pdf http://dro.deakin.edu.au/eserv/DU:30049965/colombo-interfirmknowledge-evid-2012.pdf http://dx.doi.org/10.1007/s00191-011-0227-3 |
Palavras-Chave | #game theory #differential games #knowledge diffusion #learning spillovers #organizational forgetting |
Tipo |
Journal Article |