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The value of a new idea: knowledge transmission, workers' mobility and market structure

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  • Marini, Marco A.

Abstract

We model the process of knowledge transmission among firms via workers mobility as a multi-stage game. In our setup an idea to be realized needs that the agent informed about the idea recruits another agent from a pool of uninformed people. This constraint generates a recursive effect of knowledge transmission via players mobility across firms which affects simultaneously the players payoffs and the number of active players engaged in market competition. We provide sufficient conditions for the game to possess a unique symmetric subgame perfect equilibrium in which all incumbent players deter the exit of their collaborators. The equilibrium outcome is shown to depend upon the success of the idea over time, expressed by the behaviour of the market demand and on playerstime preferences. A few other intuitions are provided on the interplay between technology, market structure and the market value of an innovative idea.

Suggested Citation

  • Marini, Marco A., 2005. "The value of a new idea: knowledge transmission, workers' mobility and market structure," MPRA Paper 1687, University Library of Munich, Germany, revised Jan 2006.
    • Handle: RePEc:pra:mprapa:1687
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    Cited by:

    1. Marini, Marco A., 1998. "Earnings, Coalitions and the Stability of the Firm," MPRA Paper 70728, University Library of Munich, Germany, revised 2012.

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    More about this item

    Keywords

    Innovation; Workers’ Mobility; Knowledge Transmission; Subgame Perfect Nash Equilibrium; Recursive Games;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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