Learning-by-Doing, Organizational Forgetting, and Industry Dynamics

David Besanko; Ulrich Doraszelski; Yaroslav Kryukov; Mark Satterthwaite

doi:10.3982/ecta6994

Econometrica Vol. 78 No. 2 2010

Learning-by-Doing, Organizational Forgetting, and Industry Dynamics

David Besanko^1,2; Ulrich Doraszelski^3,4; Yaroslav Kryukov⁵; Mark Satterthwaite^1,2

¹ Northwestern University · ² Kellogg's (Canada) · ³ Harvard University · ⁴ Harvard University Press · ⁵ Carnegie Mellon University

open access

Abstract

Learning-by-doing and organizational forgetting are empirically important in a variety of industrial settings. This paper provides a general model of dynamic competition that accounts for these fundamentals and shows how they shape industry structure and dynamics. We show that forgetting does not simply negate learning. Rather, they are distinct economic forces that interact in subtle ways to produce a great variety of pricing behaviors and industry dynamics. In particular, a model with learning and forgetting can give rise to aggressive pricing behavior, varying degrees of long-run industry concentration ranging from moderate leadership to absolute dominance, and multiple equilibria.

DOI: 10.3982/ecta6994
Volume: 78
Issue: 2
Pages: 453-508
Language: en
Sources: bibtex:phds-export.bib openalex crossref

Learning-by-Doing, Organizational Forgetting, and Industry Dynamics

Abstract

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