nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2006‒09‒23
fourteen papers chosen by
Emanuele Canegrati
London School of Economics and Political Science

  1. Knowledge-Driven Economic Development By Sanghamitra Bandyopadhyay
  2. Consumer Choice and Revealed Bounded Rationality By Paola Manzini; Marco Mariotti
  3. Quantum Transmemetic Intelligence By Edward W. Piotrowski; Jan Sladkowski
  4. Innovation Capabilities: The Knowledge Capital Behind the Survival and Growth of Firms By Baldwin, John R.; Gellatly, Guy
  5. Group versus individual liability : a field experiment in the Philippines By Gine, Xavier; Karlan, Dean S.
  6. The Effect of Rewards and Sanctions in Provision of Public Goods By Martin Sefton; Robert Shupp; James M. Walker
  7. Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes By Dirk Sliwka
  8. A Public Dilemma: Cooperation with Large Stakes and a Large Audience By Michele Belot,; V. Bhaskar; Jeroen van de Ven
  9. Resource Allocation Contests: Experimental Evidence By David Schmidt; Robert Shupp; James M. Walker
  11. The Psychology of Online Sociability By Clemmensen, Torkil
  12. Public & Private Spillovers, Location and the Productivity of Pharmaceutical Research By Jeffrey L. Furman; Magaret K. Kyle; Iain M. Cockburn; Rebecca Henderson
  13. When Does One Bad Apple Spoil the Barrel? An Evolutionary Analysis of Collective Action By David P. Myatt; Chris Wallace
  14. An Experimental Investigation of Alternatives An Experimental Investigation of Alternatives By Morone, Andrea; Schmidt, Ulrich

  1. By: Sanghamitra Bandyopadhyay
    Abstract: This paper examines the impact of mass media and information and communications technologies (ICT) as knowledge-based infrastructures on economic development. The results strongly suggest that both mass media and ICT penetration are negatively associated with corruption. This result holds across both the entire sample (of both developed and developing countries), and only for developing countries. The same result is also obtained for the effects of ICT and mass media on economic inequality. However, ICT reveals itself inequality increasing for the developing country sample but inequality decreasing for the entire sample. Finally, lower poverty is robustly associated with higher media (newspaper circulation) penetration.
    Keywords: Information and Communications Technologies, Mass Media, Economic Growth and Development, Poverty, Corruption, Inequality
    JEL: D30 D80 O1 O57
    Date: 2006
  2. By: Paola Manzini (Queen Mary, University of London and IZA); Marco Mariotti (Queen Mary, University of London)
    Abstract: We study two boundedly rational procedures in consumer behavior. We show that these procedures can be detected by conditions on observable demand data of the same type as standard revealed preference axioms. This provides the basis for a non-parametric analysis of boundedly rational consumer behavior mirroring the classical one for utility maximization.
    Keywords: Bounded rationality, Revealed preference, Consumer choice
    JEL: D1 D11
    Date: 2006–09
  3. By: Edward W. Piotrowski; Jan Sladkowski
  4. By: Baldwin, John R.; Gellatly, Guy
    Abstract: This paper summarizes the findings of a research program aimed at outlining the importance to the firm growth process of competencies that arise from investments in intangible assets. The program has consisted of two parts. First, longitudinal databases have provided a rich set of studies on entry, exit, mergers and other aspects of dynamics related to growth and decline in firm populations. These studies have shown the pervasiveness of growth and decline in the firm population. By themselves, these studies do not demonstrate what strategies differentiate the most successful from the least successful. To do so, we have built a set of firm surveys that allowed profiles to be developed of the type of competencies that stem from investments in organizational capital. In turn, these are linked to administrative data that allow us to classify firms as either growing or declining. We then asked how differences in competencies were related to the performance of firms.
    Date: 2006–09–18
  5. By: Gine, Xavier; Karlan, Dean S.
    Abstract: Group liability is often portrayed as the key innovation that led to the explosion of the microcredit movement, which started with the Grameen Bank in the 1970s and continues on today with hundreds of institutions around the world. Group lending claims to improve repayment rates and lower transaction costs when lending to the poor by providing incentives for peers to screen, monitor, and enforce each other’s loans. However, some argue that group liability creates excessive pressure and discourages good clients from borrowing, jeopardizing both growth and sustainability. Therefore, it remains unclear whether group liability improves the lender’s overall profitability and the poor’s access to financial markets. The authors worked with a bank in the Philippines to conduct a field experiment to examine these issues. They randomly assigned half of the 169 pre-existing group liability ' centers ' of approximately twenty women to individual-liability centers (treatment) and kept the other half as-is with group liability (control). We find that the conversion to individual liability does not affect the repayment rate, and leads to higher growth in center size by attracting new clients.
    Keywords: Banks & Banking Reform,Knowledge Economy,Banking Law,Education for the Knowledge Economy,Contract Law
    Date: 2006–09–01
  6. By: Martin Sefton (University of Nottingham); Robert Shupp (Ball State University); James M. Walker (Indiana University Bloomington)
    Abstract: A growing number of field and experimental studies focus on the institutional arrangements by which individuals are able to solve collective action problems. Important in this research is the role of reciprocity and institutions that facilitate cooperation via opportunities for monitoring, sanctioning, and rewarding others. Sanctions represent a cost to both the participant imposing the sanction and the individual receiving the sanction. Rewards represent a zero sum transfer from participants giving to those receiving rewards. We contrast reward and sanction institutions in regard to their impact on cooperation and efficiency in the context of a public goods experiment.
    Date: 2006–07
  7. By: Dirk Sliwka (University of Cologne and IZA Bonn)
    Abstract: An explanation for motivation crowding-out phenomena is developed in a social preferences framework. Besides selfish and fair or altruistic types a third type of agents is introduced: These ‘conformists' have social preferences if they believe that sufficiently many of the others do too. When there is asymmetric information about the distribution of preferences (the `social norm'), the incentive scheme offered or autonomy granted can reveal a principal's beliefs about that norm. High-powered incentives may crowd out motivation as pessimism about the norm is conveyed. But by choosing fixed wages or granting autonomy the principal may signal trust in a favorable social norm.
    Keywords: social preferences, incentives, intrinsic motivation, motivation crowding-out, social norms, trust, conformity, selection
    JEL: M52 J33 D23
    Date: 2006–09
  8. By: Michele Belot,; V. Bhaskar; Jeroen van de Ven
    Abstract: We analyze a large-stakes prisoner's dilemma game played on a TV show. Players cooperate 40% of the time, demonstrating that social preferences are important; however, cooperation is significantly below the 50% threshold that is required for inequity aversion to sustain cooperation. Women cooperate significantly more than men, while players who have "earned" more of the stake cooperate less. A player's promise to cooperate is also a good predictor of his decision. Surprisingly, a player's probability of cooperation is unrelated to the opponent's characteristics or promise. We argue that inequity aversion alone cannot adequately explain these results; reputational concerns in a public setting might be more important.
    Date: 2006–09–08
  9. By: David Schmidt (Federal Trade Commission, Bureau of Economics); Robert Shupp (Ball State University); James M. Walker (Indiana University Bloomington)
    Abstract: Across many forms of rent seeking contests, the impact of risk aversion on equilibrium play is indeterminate. We design an experiment to compare individuals’ decisions across three contests which are isomorphic under risk-neutrality, but are typically not isomorphic under other risk preferences. The pattern of individual play across our contests is not consistent with a Bayes-Nash equilibrium for any distribution of risk preferences. We show that replacing the Bayes-Nash equilibrium concept with the quantal response equilibrium, along with heterogeneous risk preferences can produce equilibrium patterns of play that are very similar to the patterns we observe.
    Keywords: rent seeking, experiments, risk aversion, game theory
    JEL: C72 C92 D72
    Date: 2005–02
  10. By: Jim Engle-Warnick; Andreas Leibbrandt
    Abstract: We alter who gets the last word on the outcome in three different types of trust games: the first mover the second mover, or, a committee comprised of first and second movers. The committee functions in a manner similar to a peer review process, in which experienced subjects pass judgment on the outcome reached by a different pair of subjects. Surprisingly, giving the first mover the last word benefits the second mover. Letting the committee decided increaes the first mover's trust. And first and second movers pass different types of judgments when they act as a committee. Length 29 pages
    JEL: C92
    Date: 2006–09
  11. By: Clemmensen, Torkil (Department of Informatics, Copenhagen Business School)
    Abstract: In this chapter, I will review current approaches to online sociability and present and exemplify a psychological theory, the Social Reality theory, of online sociability. By analyzing sociability in a virtual world based university course, I will present and analyze examples on how to understand the students’ design of the conditions for sociability as communication about cultural symbols, such as avatars and virtual landscapes, and the social reality of perceived groups of people. The analysis results will be used to illustrate different kinds of online sociability: superficial, convivial, and negative sociability. The chapter suggests solutions and recommendations to designers and researchers with a focus on online communities and networked communication.
    Keywords: None
    JEL: H00
    Date: 2006–09–15
  12. By: Jeffrey L. Furman; Magaret K. Kyle; Iain M. Cockburn; Rebecca Henderson
    Abstract: While there is widespread agreement among economists and management scholars that knowledge spillovers exist and have important economic consequences, researchers know substantially less about the "micro mechanisms" of spillovers -- about the degree to which they are geographically localized, for example, or about the degree to which spillovers from public institutions are qualitatively different from those from privately owned firms (Jaffe, 1986; Krugman, 1991; Jaffe et al., 1993; Porter, 1990). In this paper we make use of the geographic distribution of the research activities of major global pharmaceutical firms to explore the extent to which knowledge spills over from proximate private and public institutions. Our data and empirical approach allow us to make advances on two dimensions. First, by focusing on spillovers in research productivity (as opposed to manufacturing productivity), we build closely on the theoretical literature on spillovers that suggests that knowledge externalities are likely to have the most immediate impact on the production of ideas (Romer, 1986; Aghion & Howitt, 1997). Second, our data allow us to distinguish spillovers from public research from spillovers from private, or competitively funded research, and to more deeply explore the role that institutions and geographic proximity play in driving knowledge spillovers.
    JEL: L23 L65 O3 R3
    Date: 2006–09
  13. By: David P. Myatt; Chris Wallace
    Abstract: This paper studies n-player collective-action games in which a public good is produced if and only if m or more volunteers contribute to it. Quantal-response strategy revisions allow play to move between equilibria in which a team of m players successfully provide, and an equilibrium in which the collective action fails. A full characterisation of long-run play reveals the determinants of success. These include the correlation between players` costs of provision and their valuations for the good. The addition of an extra "bad apple" player can "spoil the barrel" by destabilising successful teams. A contemporary application is the team-based provision of open-source software. The analysis reveals the features of successful open-source projects, and suggests a rationale for limiting the pool of possible contributors.
    Keywords: Collective Action, Evolution, Teams, Equilibrium Selection, Concordance, Open-Source Software
    JEL: C72 C73 H41
    Date: 2006
  14. By: Morone, Andrea; Schmidt, Ulrich
    Abstract: Experimental research on decision making under risk has until now always employed choice data in order to evaluate the empirical performance of expected utility and the alternative nonexpected utility theories. The present paper performs a similar analysis which relies on pricing data instead of choice data. Since pricing data lead in many cases to a different ordering of lotteries than choices (e.g. the preference reversal phenomenon) our analysis may have fundamental different results than preceding investigations. We elicit three different types of pricing data: willingness-to-pay, willingness-to-accept and certainty equivalents under the Becker-DeGroot-Marschak (BDM) incentive mechanism. One of our main result shows that the comparative performance of the single theories differs significantly under these three types of pricing data.
    Keywords: expected utility, non-expected utility, experiments, WTP, WTA, BDM
    JEL: C91 D81
    Date: 2006

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