The burden of knowledge

Investment bankers value securities, experts taste cheese, store buyers observe jewelry being modeled, and theater owners see movies before they are released.

People cannot utilize their additional, better information, even when they should in a bargaining situation. Not that it ever has been, but now, with the proliferation of the electronic age, we are more aware of just how imperfect the world and society has become.

The burden, that is. In cross-section, the model predicts that specialization and teamwork will be greater in deeper areas of knowledge while, surprisingly, educational attainment will not vary across fields.

Let us start with just a few examples. But alas, our world is not perfect.

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The knowledge burden mechanism suggests that the nature of innovation is changing, with negative implications for long-run economic growth. Innovators can compensate in their education by seeking narrower expertise, but narrowing expertise will reduce their individual capacities, with implications for the organization of innovative activity - a greater reliance on teamwork - and negative implications for growth.

Over time, educational attainment will rise while increased specialization and teamwork follow from a sufficiently rapid increase in the burden of knowledge. Upward trends in academic collaboration and lengthening doctorates, which have been noted in other research, can also be explained in this framework.

A model then demonstrates how these facts can emerge in tandem.

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Study participants could not accurately reconstruct their previous, less knowledgeable states of mind, which directly relates to the curse of knowledge.

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The Burden of Truth and Knowledge