Logo Logo

Learning-By-Doing, Organizational Forgetting and Industry Dynamics, Econometrica

Abstract

Learning-by-doing and organizational forgetting have been shown to be important in a variety of industrial settings. This paper provides a general model of dynamic competition that accounts for these economic fundamentals and shows how they shape industry structure and dynamics. Previously obtained results regarding the dominance properties of firms' pricing behavior no longer hold in this more general setting. We show that organizational forgetting does not simply negate learning-by-doing. Rather, learning-by-doing and organizational forgetting are distinct economic forces. In particular, a model with both learning-by-doing and organizational forgetting can give rise to aggressive pricing behavior, market dominance, and multiple equilibria, whereas a model with learning-by-doing alone cannot

Type

Article

Author(s)

David Besanko, Ulrich Doraszelski, Yaroslav Kryukov, Mark Satterthwaite

Date Published

2010

Citations

Besanko, David, Ulrich Doraszelski, Yaroslav Kryukov, and Mark Satterthwaite. 2010. Learning-By-Doing, Organizational Forgetting and Industry Dynamics. Econometrica. 78: 453-508.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more