Competition, Procurement and Learning-By-Doing in the Space Launch Industry

Ruibing Su, Chenyu Yang and Andrew Sweeting

No 21140, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We estimate a dynamic model of the U.S. space launch industry. The model allows past launches to improve rocket reliability and lower launch costs. It also allows the government to make forward-looking procurement choices. We use the model to analyze policy-relevant issues in the recent history of the industry: the 2006 United Launch Alliance "merger-to-monopoly" and the effects of efficiencies in the form of learning synergies; innovations, such as SpaceX's Falcon 9 and ULA's recent introduction of Vulcan Centaur; the costs and benefits of forward-looking procurements; and, the trade-offs between the advantages of centralized control and possible inefficiencies.

JEL-codes: C73 D21 D43 L13 L41 (search for similar items in EconPapers)
Date: 2026-02
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