Diffusion of ideas in networks with endogenous search
van Vlokhoven,Has
van Vlokhoven,Has
Abstract
I study the diffusion of technology when the decision to search for productivity-enhancing technologies depends on the network of interactions between agents. Agents have the option to engage in costly learning from their first-degree connections. The more productive an agent's connections, the higher the gains from learning. Hence, the network affects the reservation productivity at which agents choose to learn and, therefore, affects aggregate productivity. I find that the denser the network, the higher total factor productivity and the lower inequality on average. This effect is due to less dispersed gains from learning across nodes when network density increases. Despite the increase in productivity, the share of agents that learn in equilibrium is not affected by network density.
Description
Funding Information: I thank the Jan Wallander and Tom Hedelius foundation (H2015-0359:1) for providing financial support. The funding source had no involvement in the study design or any other aspect of the study. I further thank Mohammad Akbarpour, Timo Boppart, Ben Golub, Axel Gottfries, Matt Jackson, Karin Kinnerud, Pete Klenow, Per Krusell, Hannes Malmberg, Kurt Mitman, Ezra Oberfield, Vincent Sterk, Chris Tonetti, Marc Witte (discussant) and seminar participants at IIES Stockholm University, SSE PhD workshop, Stanford, Tilburg University, UCL, the European Meeting of the Econometric Society 2018 and Warwick Economics PhD Conference 2018 for helpful comments. Funding Information: I thank the Jan Wallander and Tom Hedelius foundation ( H2015-0359:1 ) for providing financial support. The funding source had no involvement in the study design or any other aspect of the study. I further thank Mohammad Akbarpour, Timo Boppart, Ben Golub, Axel Gottfries, Matt Jackson, Karin Kinnerud, Pete Klenow, Per Krusell, Hannes Malmberg, Kurt Mitman, Ezra Oberfield, Vincent Sterk, Chris Tonetti, Marc Witte (discussant) and seminar participants at IIES Stockholm University, SSE PhD workshop, Stanford, Tilburg University, UCL, the European Meeting of the Econometric Society 2018 and Warwick Economics PhD Conference 2018 for helpful comments. Publisher Copyright: © 2022 The Author(s)
Date
2023-07
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Keywords
Aggregate productivity, Heterogeneous agents, Learning effort, Networks, Productivity distribution, Technology diffusion, SDG 8 - Decent Work and Economic Growth
Citation
van Vlokhoven, H 2023, 'Diffusion of ideas in networks with endogenous search', Review of Economic Dynamics, vol. 49, pp. 269-311. https://doi.org/10.1016/j.red.2022.09.002