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Knowledge diffusion through employee mobility
In high-tech industries, one important method of diffusion is through employee mobility: many of the entering firms are started by employees from incumbent firms using some of their former employers? technological know-how. This paper explores the effect of incorporating this mechanism in a general industry framework by allowing employees to imitate their employers? know-how. The equilibrium is Pareto optimal since the employees ?pay? for the possibility of learning their employers? know-how. The model?s implications are consistent with data from the rigid disk drive industry. These ...
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Learning from failure
We study decentralized learning in organizations. Decentralization is captured through a symmetry constraint on agents? strategies. Among such attainable strategies, we solve for optimal and equilibrium strategies. We model the organization as a repeated game with imperfectly observable actions. A fixed but unknown subset of action profiles are successes and all other action profiles are failures. The game is played until either there is a success or the time horizon is reached. For any time horizon, including infinity, we demonstrate existence of optimal attainable strategies and show that ...