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Is the paradise of effortless communication the ideal environment for knowledge creation? Or, can the development of local culture in regions raise knowledge productivity compared to a single region with a unitary culture? In other words, can a real technological increase in the cost of collaboration and the cost of public knowledge flow between regions, resulting in cultural differentiation between regions, increase welfare? In the framework, a culture is a set of ideas held exclusively by residents of a location. In general in the model, the equilibrium path generates separate cultures in different regions. When the authors compare this to the situation where all workers are resident in one region, R & D workers become too homogeneous and there is only one culture.
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