Proximity, knowledge integration and innovation: an agenda for agent-based studies

In this paper, we develop a theoretical model able to capture some of the main features that govern knowledge sharing and innovation. We pursue our target developing an agent-based model in which the social network of interactions is specified as a knowledge resource, and knowledge integration is seen as the process by which the resource can be applied to innovation. The results of the simulation exercises show that the initial architecture of acquaintance networks is a crucial factor for innovation. Innovating has proven to be more than simply equating endowments of initial skills with firm performance. In fact, the performance of the system showed high sensitivity to the arrangement of the firm’s initial location in the social network. Moreover, the way in which acquaintance networks were mobilized emerged as a key determinant of innovation patterns. The model presented here is a relatively theoretical, stylized model and we employ it to draw some general, albeit preliminary conclusions, while illustrating some of the theory relevant to the issues discussed. It is argued that the model might serve the purpose of setting an agenda for further research along this line of investigation—that is, knowledge integration patterns and firms partnerships formation.     

Experimental evidence on tax salience and tax incidence

Although a basic theoretical principle in public economics assumes that individuals optimize fully with respect to the introduction of a tax, a growing body of research is proving that several heuristics are in place when people take decisions. We re‐examine the well known liability side equivalence principle in the light of the concept of salience. While these two topics have been extensively investigated in isolation, this paper innovates on the previous literature in that it focuses on their joint effects. Is tax incidence dependent on whether the subjects face a salient rather than a nonsalient tax? Does the salience of a tax exert a different effect depending on who is legally committed to bear the tax burden? We address these questions through a laboratory experiment in which one unit of a fictitious good is being traded through a double‐auction market institution. Based on a panel data analysis, our contribution shows that point of collection matters and determines the economic incidence of tax. Additionally, we find that the joint effect of salience and statutory incidence does not alter the informative efficiency, but has a positive effect on buyers’ allocational efficiency when the tax is levied on sellers.     

“Less is more” or “more is better”? The effect of asymmetric information distribution on market efficiency and wealth inequality

Journal of Economic Interaction and Coordination - We provide experimental and empirical evidence on the role of information distribution and accuracy in solving market inefficiency and the related...     

A simple note on herd behaviour

In his ‘Simple model of herd behaviour’, (Banerjee A (1992) A simple model of herd behaviour. Q J Econ CVII:797–817) shows that—in a sequential game—if the first two players have chosen the same action, player 3 and all subsequent players will ignore his/her own information and start a herd, an irreversible one. In this paper, we analyse the role played by the tie-breaking assumptions in reaching the equilibrium. We show that: players’ strategies are parameter dependent—an incorrect herd may be reversed; a correct herd is irreversible.

Voluntary contributions in a system with uncertain returns: a case of systemic risk

Journal of Economic Interaction and Coordination - This paper investigates systemic risk that emerges from the interplay between uncertain returns to individual actions, uncertainty on...     

Knowledge Diffusion and Networking in the Organic Production Sector: A Case Study

Knowledge Diffusion and Networking in the Organic Production Sector: A Case Study
Recent uncertainty throughout the food system has put pressure on European farmers, now facing economic globalisation, changing consumer preferences, and a new legal and regulatory framework. Under these new circumstances, policy-makers must identify new strategies for developing food production systems in ways that benefit the whole of society, whilst minimising negative effects upon the environment. In this regard, the organic food sector, characterised by an ever more complex legislative framework and policy environment, presents an opportunity and a challenge for policy-makers as well as for farms and firms. This article reports findings from a case study of knowledge diffusion in the organic sector in the province of Foggia, a developmentally backward area in Southern Italy. Our study shows that despite a cohesive'network of interactions' among organic producers, exchanges of knowledge are fairly marginal. This communication void is partially filled by local institutions that are shown to be effective in diffusing juridical and technical knowledge but less effective in providing commercial/market information. Further institutional efforts are required to cover these knowledge gaps. The study draws attention to some policy issues that can be shared by groups of organic producers elsewhere with characteristics similar to the Foggian case study, similarities that call for institutions to facilitate the creation, interpretation, and sharing of knowledge.     

Financial markets in the laboratory: an experimental analysis of some stylized facts

This paper provides experimental evidence explaining a number of stylized facts associated with the behaviour of financial returns, in particular the fat tailed nature of their distribution and the persistence in their volatility. By means of a laboratory experiment, we investigate the effect of the quantity and quality of information present in a financial market upon its stylized facts, showing how both the quality and quantity of information might have an impact on volatility clustering and the emergence of fat tail returns.     

Does a ‘financial transaction tax’ drive out information mirages? An experimental analysis

Motivated by the debate over the economic implications of financial transaction taxes, the present study involved a thorough investigation of the impact of such taxes on a financial market of the type described by Camerer and Weigelt (J Bus 64:463–493, 1991), whereby noise traders are unaware of whether privileged information is fluctuating in the market. Two treatment conditions were opposed to a baseline condition in which no tax was levied. The two treatment conditions imposed a transaction tax equal to 0.5% and 1% of each transaction’s market value, respectively. The findings show that: (1) the introduction of a tax did not affect the occurrence of a mirage, (2) the introduction of a tax did not improve market efficiency and (3) the introduction of a tax did not reduce the number of transactions.

     

The effect of rating agencies on herd behaviour

This paper purports to provide some evidence on the effect of rating agencies in financial markets. By means of a laboratory experiment, we investigate the effect and interaction between private and public information. We reached two conclusions: (1) indeed, the rating agency can speed up price convergence, (2) but not always to the fundamental price.