When does "Learning by Doing" generate current losses?
ISSN: 1435-5469
Year of publication: 2001
Volume: 3
Issue: 1
Pages: 55-69
Type: Article
More publications in: Spanish economic review
Abstract
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.