A model in which agents on both sides of the market are subject to informational cascades isexami... more A model in which agents on both sides of the market are subject to informational cascades isexamined. In an uncertain environment with asymmetric information agents tend to beoveroptimistic about the state of the world, a result that fits with empirical evidence on financingnew technologies. This overoptimism based on mutual illusions makes the system vulnerable totwo-sided bubbles, and may be one
This paper models an economy in which a large number of agents are choosing among several technol... more This paper models an economy in which a large number of agents are choosing among several technologies. There is a single, global, market for the technologies but they are subject to localized network externalities in use. We examine the issue of technological standardization, and the coordination of choices among the agents. We generate equilibirum conditions under two spatial conditions -
Over the twentieth century universities in the industrialized world have evolved from being "... more Over the twentieth century universities in the industrialized world have evolved from being "universities of culture" to "universities of innovation." Policy makers and universities themselves see that one of their major roles is supporting industrial innovation and thus economic growth. We argue that this rests on a mis-cconception of the nature of innovation and the value of universities. We argue that a more appropriate function for this institution is as the "university of reflection" where scholarship and truth-seeking are the ultimate goals.
all had a helpful hand in shaping this work. But, the views expressed and the defects that remain... more all had a helpful hand in shaping this work. But, the views expressed and the defects that remain are ours. SUMMARY We present an original modeling tool that can be used to study the social mechanisms by which individual software developers' efforts are allocated within large and complex open source projects. The dynamical agent-based model is first described analytically in a deterministic discrete choice framework. Next, the results of simulations experiments using a stochastic specification are presented, to study the effects of various structural parameters that reflect "community norms" and governance rules affecting the behaviors of individuals associated with the particular project. In addition to the relative peer evaluation of different kinds of programming work associated with its constituent modules, individual developer's behaviors choices among the latter appear to be affected by the clustering of others developers at certain "hot spots" of d...
Innovation is a source of increasing productivity, but it is also a source of stress. Psychologic... more Innovation is a source of increasing productivity, but it is also a source of stress. Psychological research shows that moderate stress increases the productivity of an actor, but above a certain level, additional stress decreases productivity. Stress is reduced by coping behaviour of the actor, and in addition it is buffered by social relations. However, high levels of stress negatively
International Journal of Industrial Organization, 1997
The aim of this paper is to study emergent patterns of demand when there are social interactions ... more The aim of this paper is to study emergent patterns of demand when there are social interactions between different consumers. Specifically, our concern is with the case in which consumers' preferences are influenced by the consumption behaviour of others. The analysis recognises three reference groups. The first is a peer group of similar consumers, with whom the individual interacts on
Empirical analyses of research and development find strong evidence that these activities tend to... more Empirical analyses of research and development find strong evidence that these activities tend to cluster geographically. Clusters are thought to emerge from the presence of localized positive externalities. This paper presents a model of this clustering behaviour. We find that phase changes in clustering exist both as the strength of local externalities changes and as the degree of heterogeneity among
The debate on software intellectual property rights (IPRs) has not only highlighted fundamental i... more The debate on software intellectual property rights (IPRs) has not only highlighted fundamental issues regarding the scheme of protection that software enjoys, it has also pointed out major gaps in the representation of computer programs as economic goods. In this respect, various interpretations of software propose a limited outlook by referring only to particular aspects of computer programs. The paper discusses the economic nature of software and computational processes and how they should be properly represented as commodities by focusing on software IPR legislation in the US. It elaborates the similarities and differences between software applications and machines on the basis of historical evidence from the evolution of information technologies and computer science. Further, we discuss whether computer programs should enjoy IPR protection (like their physical equivalents) and which legal regime would induce the maximal degree of societal benefits, while satisfying private and ...
This paper is about the behaviour of a society in which learning individuals play a Prisoner’s Di... more This paper is about the behaviour of a society in which learning individuals play a Prisoner’s Dilemma that guides social promotion and demotion. The direct effect of the payoff-based socialization that is implemented here is segregation. However, segregation permits the survival of cooperation as it (unintendedly) preserves cooperators from detrimental interactions with defectors. Very large amounts of cooperation can be observed in the long run.
We develop a model of an innovative industry to examine how information technology, by both enhan... more We develop a model of an innovative industry to examine how information technology, by both enhancing matching efficiency and knowledge sharing, can have an ambiguous effect on the total amount of innovation. We consider a population of firms holding different knowledge expertise, and forming partnerships to conduct joint R&D. We assume that bringing together different expertise has positive value for innovating but also that joint innovation implies a partial convergence of the partners'' expertise. We study how the distribution of firms changes and thus how the innovative potential of the economy evolves. We show that as heterogeneity is used as an input by the innovative process, the industry must eventually collapse to a unique expertise, but how fast this takes place depends on the quality of IT. As a result of falling dispersion, a tension arises between static and dynamic efficiency. JEL Classification Numbers: C78,O33,O38.
The evolution of networks is studied in an environment where innovation takes place as a result o... more The evolution of networks is studied in an environment where innovation takes place as a result of agents bringing together their knowledge endowments. Agents freely form pairs that must constitute a stable matching in which the rankings are made on the basis of the innovative ability of any possible pair. Once innovation has taken place the new knowledge generated is allocated to the individuals as a function of their joint profile and the process is iterated. We study the properties of the dynamic network formed by these interactions, and the resultant knowledge dynamics. We find evidence that the substitution patterns between different types of knowledge and the details of the way partners pool their knowledge is of great importance in determining first the emergence of expertise of a certain type in the economy, and second the stability of a number of network structures.
A model in which agents on both sides of the market are subject to informational cascades isexami... more A model in which agents on both sides of the market are subject to informational cascades isexamined. In an uncertain environment with asymmetric information agents tend to beoveroptimistic about the state of the world, a result that fits with empirical evidence on financingnew technologies. This overoptimism based on mutual illusions makes the system vulnerable totwo-sided bubbles, and may be one
This paper models an economy in which a large number of agents are choosing among several technol... more This paper models an economy in which a large number of agents are choosing among several technologies. There is a single, global, market for the technologies but they are subject to localized network externalities in use. We examine the issue of technological standardization, and the coordination of choices among the agents. We generate equilibirum conditions under two spatial conditions -
Over the twentieth century universities in the industrialized world have evolved from being "... more Over the twentieth century universities in the industrialized world have evolved from being "universities of culture" to "universities of innovation." Policy makers and universities themselves see that one of their major roles is supporting industrial innovation and thus economic growth. We argue that this rests on a mis-cconception of the nature of innovation and the value of universities. We argue that a more appropriate function for this institution is as the "university of reflection" where scholarship and truth-seeking are the ultimate goals.
all had a helpful hand in shaping this work. But, the views expressed and the defects that remain... more all had a helpful hand in shaping this work. But, the views expressed and the defects that remain are ours. SUMMARY We present an original modeling tool that can be used to study the social mechanisms by which individual software developers' efforts are allocated within large and complex open source projects. The dynamical agent-based model is first described analytically in a deterministic discrete choice framework. Next, the results of simulations experiments using a stochastic specification are presented, to study the effects of various structural parameters that reflect "community norms" and governance rules affecting the behaviors of individuals associated with the particular project. In addition to the relative peer evaluation of different kinds of programming work associated with its constituent modules, individual developer's behaviors choices among the latter appear to be affected by the clustering of others developers at certain "hot spots" of d...
Innovation is a source of increasing productivity, but it is also a source of stress. Psychologic... more Innovation is a source of increasing productivity, but it is also a source of stress. Psychological research shows that moderate stress increases the productivity of an actor, but above a certain level, additional stress decreases productivity. Stress is reduced by coping behaviour of the actor, and in addition it is buffered by social relations. However, high levels of stress negatively
International Journal of Industrial Organization, 1997
The aim of this paper is to study emergent patterns of demand when there are social interactions ... more The aim of this paper is to study emergent patterns of demand when there are social interactions between different consumers. Specifically, our concern is with the case in which consumers' preferences are influenced by the consumption behaviour of others. The analysis recognises three reference groups. The first is a peer group of similar consumers, with whom the individual interacts on
Empirical analyses of research and development find strong evidence that these activities tend to... more Empirical analyses of research and development find strong evidence that these activities tend to cluster geographically. Clusters are thought to emerge from the presence of localized positive externalities. This paper presents a model of this clustering behaviour. We find that phase changes in clustering exist both as the strength of local externalities changes and as the degree of heterogeneity among
The debate on software intellectual property rights (IPRs) has not only highlighted fundamental i... more The debate on software intellectual property rights (IPRs) has not only highlighted fundamental issues regarding the scheme of protection that software enjoys, it has also pointed out major gaps in the representation of computer programs as economic goods. In this respect, various interpretations of software propose a limited outlook by referring only to particular aspects of computer programs. The paper discusses the economic nature of software and computational processes and how they should be properly represented as commodities by focusing on software IPR legislation in the US. It elaborates the similarities and differences between software applications and machines on the basis of historical evidence from the evolution of information technologies and computer science. Further, we discuss whether computer programs should enjoy IPR protection (like their physical equivalents) and which legal regime would induce the maximal degree of societal benefits, while satisfying private and ...
This paper is about the behaviour of a society in which learning individuals play a Prisoner’s Di... more This paper is about the behaviour of a society in which learning individuals play a Prisoner’s Dilemma that guides social promotion and demotion. The direct effect of the payoff-based socialization that is implemented here is segregation. However, segregation permits the survival of cooperation as it (unintendedly) preserves cooperators from detrimental interactions with defectors. Very large amounts of cooperation can be observed in the long run.
We develop a model of an innovative industry to examine how information technology, by both enhan... more We develop a model of an innovative industry to examine how information technology, by both enhancing matching efficiency and knowledge sharing, can have an ambiguous effect on the total amount of innovation. We consider a population of firms holding different knowledge expertise, and forming partnerships to conduct joint R&D. We assume that bringing together different expertise has positive value for innovating but also that joint innovation implies a partial convergence of the partners'' expertise. We study how the distribution of firms changes and thus how the innovative potential of the economy evolves. We show that as heterogeneity is used as an input by the innovative process, the industry must eventually collapse to a unique expertise, but how fast this takes place depends on the quality of IT. As a result of falling dispersion, a tension arises between static and dynamic efficiency. JEL Classification Numbers: C78,O33,O38.
The evolution of networks is studied in an environment where innovation takes place as a result o... more The evolution of networks is studied in an environment where innovation takes place as a result of agents bringing together their knowledge endowments. Agents freely form pairs that must constitute a stable matching in which the rankings are made on the basis of the innovative ability of any possible pair. Once innovation has taken place the new knowledge generated is allocated to the individuals as a function of their joint profile and the process is iterated. We study the properties of the dynamic network formed by these interactions, and the resultant knowledge dynamics. We find evidence that the substitution patterns between different types of knowledge and the details of the way partners pool their knowledge is of great importance in determining first the emergence of expertise of a certain type in the economy, and second the stability of a number of network structures.
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Papers by Robin Cowan