Experience, Learning, and Returns to Scale

DSpace/Manakin Repository

Experience, Learning, and Returns to Scale

Show full item record

Title: Experience, Learning, and Returns to Scale
Author(s):
Arce M., Daniel G.
Item Type: article
Keywords: Show Keywords
Abstract: The experience curve is a tool for forecasting future decreases in average cost as a function of cumulative output/volume. The extent of an experience effect has profound implications for both pricing strategy and the focus on market share as a managerial objective. At the same time, the underlying sources of the experience effect are not well understood. This article demonstrates that, as commonly measured, experience effects are aggregated with the effects of increasing returns to scale. This, implies that standard experience curve estimates are misspecified because they suffer from an omitted variable bias. Strategic implications of the experience-scale link are discussed.
Publisher: Univ North Carolina
ISSN: 0038-4038
Persistent Link: http://dx.doi.org/10.4284/0038-4038-2013.088
http://hdl.handle.net/10735.1/3991

Files in this item

Files Size Format View
EPPS-FR-DGArseM-270963.52.pdf 522.6Kb PDF View/Open Article

This item appears in the following Collection(s)


Show full item record