Review of Economic Studies Vol. 58 No. 5 1991
Collusive Market Structure Under Learning-By-Doing and Increasing Returns
Abstract
Learning-by-doing and increasing returns are often perceived to have similar implications for market structure and conduct. We analyse this in the context of an infinite-horizon price-setting game. Learning is shown to not reduce the viability of market-sharing collusion between a given number of firms, whereas intra-period increasing returns invariably does. We subsequently develop a model where the number of active firms is determined endogenously, under the assumption that the post-entry game is collusive. In this model, learning has no effect on concentration, while scale economies increase concentration.
- DOI
- 10.2307/2297948
- Volume
- 58
- Issue
- 5
- Pages
- 993
- Sources
- bibtex:phds-export.bib openalex crossref