Learning-by-Doing Organizational Forgetting and Industry Dynami.pdf.pdf' (719.38 kB)
Learning-by-Doing, Organizational Forgetting, and Industry Dynamics
journal contribution
posted on 2009-06-05, 00:00 authored by David Besanko, Ulrich Doraszelski, Yaroslav KryukovYaroslav Kryukov, Mark SatterthwaiteLearning-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 ¯rms' pricing behavior no longer hold in this more general setting. We
show that forgetting does not simply negate learning. Rather, learning and forgetting
are distinct economic forces. In particular, a model with learning and forgetting can give
rise to aggressive pricing behavior, market dominance, and multiple equilibria, whereas
a model with learning alone cannot.