Knowledge Network and Market Structure: An Analytical Perspective

This chapter falls within the category of planning thought in which the stocks of knowledge are regarded as endogenous public goods. Far from being used up in the process of production, we consider that knowledge is made available to firms by way of exchange processes on knowledge networks. Firms may choose to undertake their own R&D activities to expand their own stocks of knowledge, but eventually such stocks become available to other firms at other nodes on the networks. Two analytical frameworks are presented to relate market structure to knowledge accessibility. The model is proposed to investigate the impacts of knowledge spillover on market structure of a nodal economy. This model is extended by explicitly introducing network dimensions to analyze the relationships between nodal division of production and knowledge accessibility on the networks.