Too few resources are devoted to the creation of knowledge because profit-seeking firms
A)undervalue knowledge in their pursuit of revenues.
B)overuse their patents.
C)tend to free-ride on the knowledge that others have developed.
D)tend to rely on existing employee knowledge.

Question

Quizplus · Accepted Answer

Profit-seeking firms often free-ride on the knowledge that others have developed, rather than investing in new knowledge creation themselves. This is because the benefits of investing in knowledge creation may not be immediate or certain, and firms may prioritize short-term profits instead. Moreover, the ability to capture the full benefits of knowledge creation can be difficult, as knowledge is often difficult to protect and may be easily imitated by competitors. Thus, firms may be more inclined to invest in knowledge that can be easily protected, such as patents, rather than engaging in broader knowledge creation.

Too Few Resources Are Devoted to the Creation of Knowledge