research on the connections between agglomeration and innovation. The authors first describe the conceptual distinctions … between invention and innovation. They then discuss how these factors are frequently measured in the data and note some …, industrial diversity) that theoretical and empirical work link to innovation, and they discuss factors that help sustain these …

states. An innovation is a set of states that are not publicly known along with an asset (in a broad sense) that pays … contingent on those states. The creator of an innovation is an entrepreneur. He is represented by a probability measure on the … set of new states. All other agents perceive the innovation as ambiguous: each of them is represented by a set of …