Learning-by-doing, Market Structure and Industrial and Trade Policies

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Learning-by-doing, Market Structure and Industrial and Trade Policies

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Dasgupta, Partha
Stiglitz, Joseph E

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Joseph E. Stiglitz

Abstract

In this article the authors explore, in a preliminary way, some of the effects of learning-by-doing on the structure, conduct and performance of an industry. Learning is seen as a decline in a firm's unit production cost as a consequence of an increase in its cumulative production experience. Optimal pricing rules for nationalized industry are derived first. The authors then consider the case of an incumbent firm which is threatened by a rival possessing the option of entering the market now or at any time in the (finite) future. Entry is assumed to involve a (small) fixed cost which must be sunk. In a central example it is shown that the presence of the potential entrant has absolutely no effect on the behaviour of the incumbent. The authors therefore proceed to examine the implications of various government policies. Examples are produced where a variant of the classical infant-industry argument holds and also ones where the presence of a foreign learning curve provides an argument for the domestic government to introduce an import subsidy.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 80.

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Date of creation: Oct 1985
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Handle: RePEc:cpr:ceprdp:80

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Article
- Dasgupta, Partha & Stiglitz, Joseph E, 1988. "Learning-by-Doing, Market Structure and Industrial and Trade Policies," Oxford Economic Papers, Oxford University Press, vol. 40(2), pages 246-68, June. [Downloadable!] (restricted)

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Jørgen Drud Hansen & Camilla Jensen & Erik Strøjer Madsen, 2001. "Green Subsidies and Learning-by-doing in the Windmill Industry," CIE Discussion Papers 2001-06, University of Copenhagen. Department of Economics. Centre for Industrial Economics. [Downloadable!]
Jun, Byoung & Vives, Xavier, 2001. "Incentives in Dynamic Duopoly," CEPR Discussion Papers 2899, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Besanko, David & Doraszelski, Ulrich & Kryukov, Yaroslav & Satterthwaite, Mark, 2007. "Learning-by-Doing, Organizational Forgetting and Industry Dynamics," CEPR Discussion Papers 6160, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- David Besanko & Ulrich Doraszelski & Yaroslav Kryukov & Mark Satterthwaite, 2007. "Learning-by-Doing, Organizational Forgetting, and Industry Dynamics," Levine's Bibliography 321307000000000903, UCLA Department of Economics. [Downloadable!]
- David Besanko & Ulrich Doraszelski, 2005. "Learning-by-Doing, Organizational Forgetting, and Industry Dynanmics," Computing in Economics and Finance 2005 236, Society for Computational Economics.
Jørgen Drud Hansen & Camilla Jensen & Erik Strøjer Madsen, 2002. "The Establishment of the Danish Windmill Industry - Was it Worthwhile?," CIE Discussion Papers 2002-07, University of Copenhagen. Department of Economics. Centre for Industrial Economics. [Downloadable!]
E. Young Song, 2000. "Temporary Protection and Technology Choice Under the Learning Curve," Econometric Society World Congress 2000 Contributed Papers 0248, Econometric Society. [Downloadable!]
Other versions:
- E. Young Song, 2005. "Temporary Protection and Technology Choice under the Learning Curve," Review of International Economics, Blackwell Publishing, vol. 13(2), pages 391-396, 05. [Downloadable!] (restricted)
Joseph E. Stiglitz, 1990. "Markets and Development," NBER Working Papers 2961, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Francisco Alvarez Gonzalez & Emilio Cerda Tena, . "A solution Method for a Class of Learning by Doing Models," Computing in Economics and Finance 1996 _002, Society for Computational Economics. [Downloadable!]
Elena Andreou & Alessandra Pelloni & Marianne Sensier, 2008. "Is Volatility Good for Growth? Evidence from the G7," The School of Economics Discussion Paper Series 0804, Economics, The University of Manchester. [Downloadable!]
Other versions:
- Andreou Elena & Pelloni Alessandra & Sensier Marianne, 2008. "Is volatility good for growth? Evidence from the G7," wp.comunite 0041, Department of Communication, University of Teramo. [Downloadable!]
- Elena Andreou & Alessandra Pelloni & Marianne Sensier, 2008. "Is Volatility Good for Growth? Evidence from the G7," CEIS Research Paper 114, Tor Vergata University, CEIS, revised 14 Jul 2008. [Downloadable!]
- Elena Andreou & Alessandra Pelloni & Marianne Sensier, 2008. "Is Volatility Good for Growth? Evidence from the G7," Centre for Growth and Business Cycle Research Discussion Paper Series 97, Economics, The Univeristy of Manchester. [Downloadable!]
C. Lanier Benkard, 2000. "Learning and Forgetting: The Dynamics of Aircraft Production," American Economic Review, American Economic Association, vol. 90(4), pages 1034-1054, September. [Downloadable!] (restricted)
Vives, Xavier, 2006. "Strategic Complementarities in Multi-Stage Games," CEPR Discussion Papers 5583, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Madsen, Erik Strøjer & Jensen, Camilla & Hansen, Jørgen Drud, 2002. "Scale in Technology and Learning-by-Doing in the Windmill Industry," Working Papers 02-2, University of Aarhus, Aarhus School of Business, Department of Economics. [Downloadable!]
Emmanuel Petrakis & Eric Rasmusen & Santanu Roy, 1995. "The Learning Curve in a Competitive Industry," Industrial Organization 9506001, EconWPA. [Downloadable!]
Other versions:
- Petrakis, E. & Rasmusen, E. & Roy, S., 1994. "The Learning Curve in a Competitive Industry," Papers 94-004, Indiana - Center for Econometric Model Research.
- Petrakis, E. & Rasmussen, E. & Roy, S., 1994. "The Learning Curve in a Competitive Industry," Papers 9433-a, Erasmus University of Rotterdam - Econometric Institute.
- Emmanuel Petrakis & Eric Rasmusen & Santanu Roy, 1997. "The Learning Curve in a Competitive Industry," RAND Journal of Economics, The RAND Corporation, vol. 28(2), pages 248-268, Summer. [Downloadable!] (restricted)
C. Lanier Benkard, 2000. "A Dynamic Analysis of the Market for Wide-Bodied Commercial Aircraft," NBER Working Papers 7710, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Bläsi, Albrecht & Requate, Till, 2005. "Learning-by-Doing with Spillovers in Competitive Industries, Free Entry, and Regulatory Policy," Economics Working Papers 2005,09, Christian-Albrechts-University of Kiel, Department of Economics. [Downloadable!]
Joseph E. Stiglitz & Andrew Charlton, 2005. "Un cycle de négociations commerciales pour le développement ?," Revue d’économie du développement, De Boeck Université, vol. 19(4), pages 17-54. [Downloadable!]
Bruce C. Greenwald & Joseph E. Stiglitz, 1991. "Financial Market Imperfections and Productivity Growth," NBER Working Papers 2945, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Greenwald, Bruce C. & Kohn, Meir & Stiglitz, Joseph E., 1990. "Financial market imperfections and productivity growth," Journal of Economic Behavior & Organization, Elsevier, vol. 13(3), pages 321-345, June. [Downloadable!] (restricted)
Vives, Xavier, 2006. "Strategic complementarity in multi-stage games," IESE Research Papers D/619, IESE Business School.
Other versions:
- Xavier Vives, 2009. "Strategic complementarity in multi-stage games," Economic Theory, Springer, vol. 40(1), pages 151-171, July. [Downloadable!] (restricted)
Stephen W. Salant & Greg Shaffer, 1999. "Unequal Treatment of Identical Agents in Cournot Equilibrium," American Economic Review, American Economic Association, vol. 89(3), pages 585-604, June. [Downloadable!] (restricted)
C. Lanier Benkard, 1999. "Learning and Forgetting: The Dynamics of Aircraft Production," NBER Working Papers 7127, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Leandro Arozamena & Estelle Cantillon, 2000. "Investment Incentives in Procurement Auctions," Cowles Foundation Discussion Papers 1276, Cowles Foundation, Yale University. [Downloadable!]
Other versions:
- Arozamena, Leandro & Cantillon, Estelle, 2001. "Investment Incentives in Procurement Auctions," CEPR Discussion Papers 2676, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Leandro Arozamena & Estelle Cantillon, 2004. "Investment Incentives in Procurement Auctions," Review of Economic Studies, Blackwell Publishing, vol. 71(1), pages 1-18, 01. [Downloadable!] (restricted)

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