Dynamics of knowledge creation and transfer: The two person case

This paper presents a micro-model of knowledge creation and transfer for a couple. Heterogeneity of people in their state of knowledge is essential for successful cooperation in the joint creation of new ideas. However, the very process of cooperative knowledge creation affects the heterogeneity of people through the accumulation of knowledge in common. The model features myopic agents in a pure externality model of interaction. The equilibrium process tends to result in the accumulation of too much knowledge in common compared to the most productive state. Equilibrium paths are found analytically, and they are a discontinuous function of initial heterogeneity.     

Communication research matters — Bericht von der 51. Jahrestagung der ICA in Washington D.C.

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Economics of advertising: Emerging functions of Internet advertising

This paper intends to highlight the emerging force of the Internet as an advertising medium. The economic functions of Internet advertising are examined. Moreover, the paper aims to evaluate the relative impacts on optimal advertising models. Our discussion also includes analysis of associated price-cost margins with respect to optimal advertising budgets and strategic reactions. All in all, this paper should provide entrepreneurs with more crucial knowledge of advertising strategies offered by the new medium. Moreover, it will equip scientists and technologists with more insights into the economic aspects and strategic values of Internet advertising. This revised version was published online in August 2006 with corrections to the Cover Date.     

Monetary Shocks and the Fundamental Determinants of the Real Exchange Rate under the Hong Kong Currency Board

To assess the claim that flexible markets render monetary policy unimportant under the currency board, we test the impact of monetary shocks on Hong Kong's real exchange rate. Using vector autoregressions, we find persistent effects of monetary shocks on the real exchange rate, implying money is not neutral in Hong Kong. We then estimate the equilibrium real exchange rate, employing the definition developed by Rogoff-Obstfeld-Stein. The divergence between the observed and equilibrium rates is clearly stationary throughout the 1980s, but after a key policy shift in 1991 that divergence becomes non-stationary. We conclude that Hong Kong's real exchange rate moved away from the real fundamentals in the latter period.     

Bifurcations in regional migration dynamics

The tomahawk bifurcation is used by Fujita et al. [Fujita, M., Krugman P., Venables A.J., 1999, The Spatial Economy: Cities, Regions, and International Trade, MIT Press: Cambridge, MA.] in a model with two regions to explain the formation of a core–periphery urban pattern from an initial uniform distribution. Baldwin et al. [Baldwin, R., Forslid, R., Martin, P., Ottaviano, G.I.P., Robert-Nicoud, F., 2003, Economic Geography and Public Policy, Princeton University Press: Princeton, NJ.] show that the tomahawk bifurcation disappears when the two regions have an uneven population of immobile agricultural workers. Thus, the appearance of this type of bifurcation is the result of assumed exogenous model symmetry. We provide a general analysis in a regional model of the class of bifurcations that have crossing equilibrium loci, including the tomahawk bifurcation, by examining arbitrary smooth parameter paths in a higher dimensional parameter space. We find that, in a parameter space satisfying a mild rank condition, generically in all parameter paths this class of bifurcations does not appear. In other words, conclusions drawn from the use of this bifurcation to generate a core–periphery pattern are not robust.     

Stakeholder perspectives on the current and future roles of UK bus-based Park and Ride

UK bus-based Park and Ride (P&R) has increased significantly in popularity over the past 40 years although there are doubts over its role in reducing car use. This paper presents the findings from interviews with eight key stakeholders involved in UK P&R, which sought to provide insights into the popularity of P&R, particularly at the local government level, its success, and how the concept of P&R can be developed in the future to improve its role in reducing car use whilst maintaining its popularity. It is suggested that there are a range of goals for the use of P&R which extend beyond traffic reduction. It is discussed how there may be potential to develop the concept, particularly by decentralising P&R sites and developing their role as interchanges for public transport.     

Productivity Growth and its Components in Chinese Agriculture after Reforms

This study uses nonparametric Malmquist procedures to investigate the temporal and spatial nature of productivity growth and its components in Chinese agriculture over the period 1980–1995. The results of this study indicate that total factor productivity grew at 2.4% annually with technical change augmenting the growth by 3.8% while efficiency change reduced productivity growth by 1.3%. For all provinces, 288 out of a total of 442 cases experienced productivity growth while the rest showed productivity regression during this post-reform period. Coexistence of improvement in technical change and retardation in efficiency change indicates the lack of success in diffusing the existing agricultural technology. Continuing innovation and efficiency improvement through capital investment, modern input use, and greater competitive market pressures are important for augmenting productivity growth in Chinese agriculture.