When does Learning by Doing generate current losses?

Francisco Alvarez () and Emilio Cerdá
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Francisco Alvarez: Departamento de Análisis Económico II, Universidad Complutense de Madrid, Campus de Somosaguas, 28223 Somosaguas, Madrid, Spain Departamento de Análisis Económico I, Universidad Complutense de Madrid, Spain

Spanish Economic Review, 2001, vol. 3, issue 1, 55-69

Abstract: 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.

Keywords: Learning by Doing; monopoly; industrial organization; dynamic programming (search for similar items in EconPapers)
JEL-codes: C61 D21 L12 (search for similar items in EconPapers)
Date: 2001-04-18
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Citations: View citations in EconPapers (1)

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