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Structural holes, innovation and the distribution of ideas

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  • Robin Cowan
  • Nicolas Jonard

Abstract

We model knowledge diffusion in a population of agents situated on a network, interacting only over direct ties. Some agents are by nature traders, others are by nature "givers": traders demand a quid pro quo for information transfer; givers do not. We are interested in efficiency of diffusion and explore the interplay between the structure of the population (proportion of traders), the network structure (clustering, path length and degree distribution), and the scarcity of knowledge. We find that at the global level, trading (as opposed to giving) reduces efficiency. At the individual level, highly connected agents do well when knowledge is scarce, agents in clustered neighbourhoods do well when it is abundant. The latter finding is connected to the debate on structural holes and social capital.
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  • Robin Cowan & Nicolas Jonard, 2007. "Structural holes, innovation and the distribution of ideas," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 2(2), pages 93-110, December.
    • Handle: RePEc:spr:jeicoo:v:2:y:2007:i:2:p:93-110
    DOI: 10.1007/s11403-007-0024-0
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    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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