When does Learning by Doing generate current losses?

We study under which conditions a learning by doing effect in the industry causes a monopolist to operate at a loss for some initial periods. Those conditions involve a parameter of the learning process, the slope of inverse demand function and the discount parameter. In order to get results, we explore the analytical solution to a T-period learning by doing model, which is also a novelty. Numerical examples are presented.

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Year of publication:	2001-04-18
Authors:	Alvarez, Francisco ; Cerdá, Emilio
Published in:	Spanish Economic Review. - Asociación Española de Economía - AEE. - Vol. 3.2001, 1, p. 55-69
Publisher:	Asociación Española de Economía - AEE
Subject:	Learning by Doing \| monopoly \| industrial organization \| dynamic programming

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Extent:	application/pdf
Type of publication:	Article
Classification:	C61 - Optimization Techniques; Programming Models; Dynamic Analysis ; D21 - Firm Behavior ; L12 - Monopoly; Monopolization Strategies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005598213