IDEAS home Printed from https://ideas.repec.org/a/spr/jknowl/v5y2014i3p585-596.html
   My bibliography  Save this article

Knowledge Creation by Consumers and Optimal Strategies of Firms

Author

Listed:
  • Tadashi Yagi

Abstract

The purposes of this paper are to describe the behaviors of consumers and producers in the knowledge creation process and derive the optimal strategy for increasing the value of creativity in the market. This paper mathematically models the incentives that consumers have to contribute to knowledge creation. This analysis complements the previous studies and elucidates the system of knowledge creation through collaboration among consumers. Unlike in previous studies, the price setting strategy of producers is examined by relating it to knowledge creation activities of consumers. The analysis in this paper reveals that the value of a product to the consumer depends on the amount of knowledge creation by consumers, which is affected by the amount of public infrastructure, which, in turn, affects the price of the product. The price movement of IT products in the real world is consistent with the predicted movement of the equilibrium price in the market. Independently of the drastic increase in the value of IT products via the rapid increase in knowledge creation, the price of IT products has not been increasing. In this regard, the model presented in this paper captures part of the real-world movements. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Tadashi Yagi, 2014. "Knowledge Creation by Consumers and Optimal Strategies of Firms," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 5(3), pages 585-596, September.
    • Handle: RePEc:spr:jknowl:v:5:y:2014:i:3:p:585-596
    DOI: 10.1007/s13132-014-0195-6
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s13132-014-0195-6
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s13132-014-0195-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marcus Berliant & Masahisa Fujita, 2008. "Knowledge Creation As A Square Dance On The Hilbert Cube," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1251-1295, November.
    2. Christopher Gunn & Alok Johri, 2011. "News and knowledge capital," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(1), pages 92-101, January.
    3. Marcus Berliant & Masahisa Fujita, 2009. "Dynamics of knowledge creation and transfer: The two person case," International Journal of Economic Theory, The International Society for Economic Theory, vol. 5(2), pages 155-179, June.
    4. Narda R. Quigley & Paul E. Tesluk & Edwin A. Locke & Kathryn M. Bartol, 2007. "A Multilevel Investigation of the Motivational Mechanisms Underlying Knowledge Sharing and Performance," Organization Science, INFORMS, vol. 18(1), pages 71-88, February.
    5. Berliant, Marcus & Fujita, Masahisa, 2012. "Culture and diversity in knowledge creation," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 648-662.
    6. Govindan, Srihari & Wilson, Robert, 2001. "Direct Proofs of Generic Finiteness of Nash Equilibrium Outcomes," Econometrica, Econometric Society, vol. 69(3), pages 765-769, May.
    7. Ikujiro Nonaka, 1994. "A Dynamic Theory of Organizational Knowledge Creation," Organization Science, INFORMS, vol. 5(1), pages 14-37, February.
    8. Govindan, Srihari & Wilson, Robert, 2003. "A global Newton method to compute Nash equilibria," Journal of Economic Theory, Elsevier, vol. 110(1), pages 65-86, May.
    9. Marcus Berliant & Masahisa Fujita, 2011. "The Dynamics of Knowledge Diversity and Economic Growth," Southern Economic Journal, John Wiley & Sons, vol. 77(4), pages 856-884, April.
    10. Stephen Gourlay, 2006. "Conceptualizing Knowledge Creation: A Critique of Nonaka's Theory," Journal of Management Studies, Wiley Blackwell, vol. 43(7), pages 1415-1436, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ibrahim Alnafrah & Sulaiman Mouselli, 2020. "Constructing the Reconstruction Process: a Smooth Transition Towards Knowledge Society and Economy in Post-Conflict Syria," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(3), pages 931-948, September.
    2. Mounir Kehal & Zuopeng (Justin) Zhang, 2020. "Knowledge Management Via AUTomated Organizational CARTography (AUTOCART)," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(1), pages 239-255, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Berliant, Marcus & Fujita, Masahisa, 2023. "Knowledge creation through multimodal communication," MPRA Paper 117452, University Library of Munich, Germany.
    2. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.
    3. Berliant, Marcus & Fujita, Masahisa, 2012. "Culture and diversity in knowledge creation," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 648-662.
    4. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2014. "The nexus between labor diversity and firm’s innovation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 303-364, April.
    5. Giovana Escrivão & Marcelo Seido Nagano, 2016. "Linking Knowledge Creation and Environmental Education," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 15(02), pages 1-23, June.
    6. Ryusuke Ihara, 2011. "Agglomeration with the pros and cons of labor heterogeneity," ERSA conference papers ersa11p528, European Regional Science Association.
    7. Kwee Keong Choong & Patrick W. Leung, 2022. "A Critical Review of the Precursors of the Knowledge Economy and Their Contemporary Research: Implications for the Computerized New Economy," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1573-1610, June.
    8. Martin Fiszbein, 2017. "Agricultural Diversity, Structural Change and Long-run Development: Evidence from the U.S," NBER Working Papers 23183, National Bureau of Economic Research, Inc.
    9. Welton Chang & Pavel Atanasov & Shefali Patil & Barbara A. Mellers & Philip E. Tetlock, 2017. "Accountability and adaptive performance under uncertainty: A long-term view," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 12(6), pages 610-626, November.
    10. Eduardo A. Haddad & Jesus P. Mena-Chalco, Otávio J.G. Sidone, 2016. "Produção Científica e Redes de Colaboração dos Docentes Vinculados aos Programas de Pós-graduação em Economia no Brasil," Working Papers, Department of Economics 2016_10, University of São Paulo (FEA-USP).
    11. Liubertė Irina, 2019. "On Social Knowledge and Its Empirical Investigation in Contemporary Organisations," Management of Organizations: Systematic Research, Sciendo, vol. 81(1), pages 21-37, June.
    12. Fumihiko Isada & Yuriko Isada, 2015. "Trans-nationalisation of a main office in a multinational firm," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 3(4), pages 15-40, November.
    13. Max Nathan, 2015. "Same difference? Minority ethnic inventors, diversity and innovation in the UK," Journal of Economic Geography, Oxford University Press, vol. 15(1), pages 129-168.
    14. Byeongwoo Kang & Kaoru Nabeshima, 2021. "National origin diversity and innovation performance: the case of Japan," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(6), pages 5333-5351, June.
    15. Gianmarco I.P. Ottaviano & Giovanni Prarolo, 2009. "Cultural Identity And Knowledge Creation In Cosmopolitan Cities," Journal of Regional Science, Wiley Blackwell, vol. 49(4), pages 647-662, October.
    16. Chris Kimble, 2013. "Knowledge management, codification and tacit knowledge," Post-Print halshs-00826911, HAL.
    17. Wasim-ul-REHMAN,* & Nabila ASGHAR** & Hafeez ur Rehman***, 2017. "Knowledge Sharing Practices on Performance: Role of Intellectuals on South Asian Perspective," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 27(2), pages 297-329.
    18. Ryusuke Ihara & Shizu Yamamoto, 2016. "Role of tolerance in communication with diverse people," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 191-202, January.
    19. Dirk Dohse & Robert Gold, 2014. "Determining the Impact of Cultural Diversity on Regional Economies in Europe. WWWforEurope Working Paper No. 58," WIFO Studies, WIFO, number 47204, March.
    20. Tomohiro MACHIKITA & Yasushi UEKI, 2011. "Impacts of Incoming Knowledge on Product Innovation: Technology Transfer in Auto-related Industries in Developing Economies," Working Papers DP-2011-08, Economic Research Institute for ASEAN and East Asia (ERIA).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jknowl:v:5:y:2014:i:3:p:585-596. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.