The Learning Curve and Durable-Goods Production
AbstractWe investigate the effect of a learning curve on the production of durable goods by examining a durable-goods monopolist in a two-period model. If the monopolist faces a learning curve, the model shows that the equilibrium quantity of the first- (second-) period products will be smaller (larger) than if there were no learning curve. Consequently, in cases where the original production cost is sufficiently large, the presence of a learning curve drives down total profits.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 12 (2001)
Issue (Month): 5 ()
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Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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- Olsen, Trond E., 1992. "Durable goods monopoly, learning by doing and the Coase conjecture," European Economic Review, Elsevier, vol. 36(1), pages 157-177, January.
- Cabral, Luis M B & Riordan, Michael H, 1994.
"The Learning Curve, Market Dominance, and Predatory Pricing,"
Econometric Society, vol. 62(5), pages 1115-40, September.
- Cabral, L. & Riordan, M., 1992. "The Learning Curve, Market Dominance and Predatory Pricing," Papers 39, Boston University - Industry Studies Programme.
- Luis M.B. Cabral & Michael Riordan, 1992. "The Learning Curve, Market Dominance and Predatory Pricing," Papers 0039, Boston University - Industry Studies Programme.
- A. M. Spence, 1981. "The Learning Curve and Competition," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 49-70, Spring.
- Bulow, Jeremy I, 1982. "Durable-Goods Monopolists," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 314-32, April.
- Atsuo Utaka, 2000. "Planned obsolescence and marketing strategy," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(8), pages 339-344.
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