IDEAS home Printed from
   My bibliography  Save this article

Entry and Learning


  • Timothy M. Devinney

    (Owen Graduate School of Management, Vanderbilt University, Nashville, Tennessee 37203)


This paper shows the difficulties associated with discerning the impact of learning and pressures of competitive entry on the price and cost of production in commodity markets. It shows that the patterns of price and cost movements over time will be dramatically affected by the entry of new competitors. If firms possess U-shaped average cost curves, entry alone can generate price and cost declines which look like learning induced reductions. Alternatively, cost increases may occur even when learning is quite strong. This research has dramatic managerial and empirical implications. Managers, operating in highly competitive environments subject to rapid entry, must put more emphasis on the role of their own day-to-day decisions in affecting cost. The fact that costs have declined may have nothing to do with learning but may be driven by their reactions to competitive pressures. Investigators empirically estimating learning curves must also be cognizant of the role entry plays in affecting cost. Simple comparisons of cost or price versus accumulated production, so common in applied studies, seriously confounds the role of entry and the consequent managerial decisions in determining accumulated production. It is argued that a more careful examination of entry needs to be taken into account when evaluating the role of learning and the estimating cost curves.

Suggested Citation

  • Timothy M. Devinney, 1987. "Entry and Learning," Management Science, INFORMS, vol. 33(6), pages 706-724, June.
  • Handle: RePEc:inm:ormnsc:v:33:y:1987:i:6:p:706-724

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Papineau, Maya, 2006. "An economic perspective on experience curves and dynamic economies in renewable energy technologies," Energy Policy, Elsevier, vol. 34(4), pages 422-432, March.
    2. repec:eee:rensus:v:77:y:2017:i:c:p:273-286 is not listed on IDEAS

    More about this item


    learning curves; competition; economics;


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:33:y:1987:i:6:p:706-724. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.