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| Author: | Petrakis, E. Rasmusen, E. Roy, S. |
| Title: | The learning curve in a competitive industry |
| Journal: | RAND Journal of Economics
1997 : SUMMER, VOL. 28:2, p. 248-268 |
| Index terms: | LEARNING CURVES INDUSTRIES COMPETITIVENESS COMPANIES |
| Language: | eng |
| Abstract: | This papers shows that learning and perfect competition are compatible and learning has curious implications for the evolution of a competitive industry. In the presence of convex learning companies must enter at the beginning of the industry or never, and the number of companies may decline predictably over time. Firms may behave differently even though they all begin with the same production opportunities . Some may enter at a small scale knowing well they will be forced to exit later; and these will initially be the most profitable. Whether or not the equilibrium contains such firms, it will contain other firms that make losses in the first period and profits in the second. |
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