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Competition, Procurement and Learning-By-Doing in the Space Launch Industry

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  • Ruibing Su
  • Chenyu Yang
  • Andrew Sweeting

Abstract

We estimate a dynamic model of the U.S. space launch industry. The model allows past launches to improve rocket reliability and lower launch costs. It also allows the government to make forward-looking procurement choices. We use the model to analyze policy-relevant issues in the recent history of the industry: the 2006 United Launch Alliance “merger-to-monopoly” and the effects of efficiencies in the form of learning synergies; innovations, such as SpaceX's Falcon 9 and ULA's recent introduction of Vulcan Centaur; the costs and benefits of forward-looking procurements; and, the trade-offs between the advantages of centralized control and possible inefficiencies.

Suggested Citation

  • Ruibing Su & Chenyu Yang & Andrew Sweeting, 2026. "Competition, Procurement and Learning-By-Doing in the Space Launch Industry," NBER Working Papers 34766, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34766
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    Cited by:

    1. Ruben Gaetani & Alexander T. Whalley, 2026. "Old Space, New Space: A Commercial Revolution in Innovation?," NBER Chapters, in: Entrepreneurship and Innovation Policy and the Economy, volume 6, National Bureau of Economic Research, Inc.
    2. Sebastien Rouillon & Marc-Alexandre Senegas, 2026. "The price of orbit: Hedonic estimates from the satellite launch market," Space Economics Working Papers 10-2026, Institute for Space Economics, revised Sep 2026.

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    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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