When does Learning by Doing generate current losses?
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.
Volume (Year): 3 (2001)
Issue (Month): 1 ()
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