The emergence of knowledge exchange: an agent-based model of a software market

We investigate knowledge exchange among commercial organi sations, the rationale behind it and its effects on the marke t. Knowledge exchange is known to be beneficial for industry, bu t in order to explain it, authors have used high level concept s like network effects, reputation and trust. We attempt to formal ise a plausible and elegant explanation of how and why compan ies adopt information exchange and why it benefits the market as a whole when this happens. This explanation is based on a multi - agent model that simulates a market of software providers. E ven though the model does not include any high-level concept s, information exchange naturally emerges during simulation s as a successful profitable behaviour. The conclusions reac hed by this agent-based analysis are twofold: (1) A straightforward se t of assumptions is enough to give rise to exchange in a softwa re market. This work was carried out when M. Chli and P . The growth of the Internet as a medium of knowledge exchange has stimulated a lot of scientific interest origina ting from various disciplines. The willingness of individua ls, organisations as well as commercial firms to share information via the Internet has been remarkable. In some sectors like scientific research, the communication of newly acquir ed knowledge and expertise in a field is considered vital for the ir advancement. On the other hand, in other sectors, the benefit s of such exchanges may not be obvious. For instance, it might even be considered damaging for pharmaceutical companies t o make public any innovations generated by their Research and Development (R&D) process. In spite of this view, exchange o f intellectual property in some industries occurs quite freq uently and in various different ways. These include the forming of strategic partnerships, the participation in open source s oftware projects and the publication of scientific papers by researc h labs that are part of commercial companies. W e study the knowledge exchange that occurs in the software industry. In particular, we focus on analysing the rationale behind this exchange as well as its effect on the industry. The complexity of software requirements is a char - acteristic that distinguishes the software market from oth ers.