Knowledge, networks and economic activity: an analysis of the effects of the network on the knowledge-based economy

I would like to disseminate a paper entitled Knowledge, networks and economic activity: an analysis of the effects of the network on the knowledge-based economy written by Joan Torrent, director of ICTs Interdisciplinary Research Group (i2TIC), brand new research group I belong to.

This paper contextualises the disruptive change of the transition to a knowledge-based economy and discusses the social sciences postulations with regards to this phenomenon. Once the general context is explained, the article focuses on the microeconomic foundations, understanding knowledge as an input and as a commodity. Finally, after discussing the microeconomics of knowledge, the paper tackles network externalities and their  impact on economic functions and market structure.

Abstract

The progressive consolidation of a knowledge-based economy has caused network effects to become a focal point of analysis into the changes in behaviour evinced by economic agents. This article analyses the changes in production and demand for knowledge commodities arising from network externalities. The analysis reveals two distinct patterns of behaviour in knowledge-based economic activity. Observable knowledge commodities are governed by the effect of direct and indirect network externalities. Also, their demand curve and business strategy depend on new-user entry (marginal value) and the relative size of the network. However, tacit knowledge commodities are governed by learning network externalities and their demand curve and business strategies are dependent on the value generated by the addition of the goods themselves to the network (intrinsic value).

This paper could help towards a better understanding of  health care systems within the network society.