Replication and Returns to Scale in Production

Christian Jensen ()

The B.E. Journal of Theoretical Economics, 2014, vol. 14, issue 1, 127-148

Abstract: Replication alone does not yield a smooth constant-returns-to-scale production function as those usually assumed in the literature. However, such a function arises endogenously with replication, driven by profit-maximization, if the efficiency of the underlying production process varies with the intensity it is operated at, and reaches a maximum at a stationary point. The result applies when the number of production processes must be discrete, thus overcoming the so-called integer problem. When inputs are non-rival, public goods or generated by externalities, replication can lead to increasing or decreasing returns to scale.

Keywords: replication; returns to scale in production; integer problem; indivisibilities; externalities; non-rival inputs (search for similar items in EconPapers)
JEL-codes: D24 E23 L23 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/bejte-2013-0040 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejtec:v:14:y:2014:i:1:p:22:n:5

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejte/html

DOI: 10.1515/bejte-2013-0040

Access Statistics for this article

The B.E. Journal of Theoretical Economics is currently edited by Burkhard C. Schipper

More articles in The B.E. Journal of Theoretical Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().