Download This PaperThe Economics of Enlightenment: Time Value of Knowledge and the Net Present Value (NPV) of Knowledge Machines
B.E. Journal of Economic Analysis and Policy, 20(2), 2019-0044.
48 Pages Posted: 11 Dec 2018 Last revised: 9 Apr 2020
Date Written: November 16, 2018
Abstract
We formulate one methodology to put a value or price on knowledge using well accepted techniques from finance. We provide justifications for these finance principles based on the limitations of the physical world we live in. We start with the intuition for our method to value knowledge and then formalize this idea with a series of axioms and models. To the best of our knowledge this is the first recorded attempt to put a numerical value on knowledge. The implications of this valuation exercise, which places a high premium on any piece of knowledge, are to ensure that participants in any knowledge system are better trained to notice the knowledge available from any source. Just because someone does not see a connection does not mean that there is no connection. We need to try harder and be more open to acknowledging the smallest piece of new knowledge that might have been brought to light by anyone from anywhere about anything.
Keywords: Knowledge Valuation, Time Value, Money, Finance, Net Present Value, Enlightenment, Economics
JEL Classification: D81, G12, D46, D8
Suggested Citation: Suggested Citation