IDEAS home Printed from https://ideas.repec.org/a/taf/ijecbs/v9y2002i2p157-174.html
   My bibliography  Save this article

Strategic Implications of Learning by Doing

Author

Listed:
  • Aidan Hollis

Abstract

This paper examines firm strategy when competitors are at different points along the learning curve. It shows that firms high on the learning curve will have strong incentives to exclude new competitors, while firms that are learning more slowly will have weaker incentives to hinder new competitors and may even wish to encourage entry. The same strategies are shown to apply when firm reputation is acquired through participation in an industry. Several examples of strategic behaviour that take advantage of differential learning speeds or heterogeneous reputations are suggested and a variety of applications of the principle involved are explored.

Suggested Citation

  • Aidan Hollis, 2002. "Strategic Implications of Learning by Doing," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(2), pages 157-174.
    • Handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:157-174
    DOI: 10.1080/13571510210134637
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/10.1080/13571510210134637
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13571510210134637?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Seabright, Paul, 1996. "The starfish effect: Can market entry by one firm encourage further entry by others?," European Economic Review, Elsevier, vol. 40(3-5), pages 541-550, April.
    2. Kathleen R. Conner, 1995. "Obtaining Strategic Advantage from Being Imitated: When Can Encouraging "Clones" Pay?," Management Science, INFORMS, vol. 41(2), pages 209-225, February.
    3. Joseph Farrell & Nancy T. Gallini, 1988. "Second-Sourcing as a Commitment: Monopoly Incentives to Attract Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(4), pages 673-694.
    4. Yi, Sang-Seung, 1999. "Entry, licensing and research joint ventures," International Journal of Industrial Organization, Elsevier, vol. 17(1), pages 1-24, January.
    5. Nancy T. Gallini & Ralph A. Winter, 1985. "Licensing in the Theory of Innovation," RAND Journal of Economics, The RAND Corporation, vol. 16(2), pages 237-252, Summer.
    6. A. M. Spence, 1981. "The Learning Curve and Competition," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 49-70, Spring.
    7. Mukesh Eswaran, 1994. "Licensees as Entry Barriers," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 673-688, August.
    8. Gallini, Nancy T, 1984. "Deterrence by Market Sharing: A Strategic Incentive for Licensing," American Economic Review, American Economic Association, vol. 74(5), pages 931-941, December.
    9. Economides, Nicholas, 1996. "Network externalities, complementarities, and invitations to enter," European Journal of Political Economy, Elsevier, vol. 12(2), pages 211-233, September.
    10. Salop, Steven C & Scheffman, David T, 1983. "Raising Rivals' Costs," American Economic Review, American Economic Association, vol. 73(2), pages 267-271, May.
    11. Katharine E. Rockett, 1990. "Choosing the Competition and Patent Licensing," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 161-171, Spring.
    12. Oliver E. Williamson, 1968. "Wage Rates as a Barrier to Entry: The Pennington Case in Perspective," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 82(1), pages 85-116.
    13. Andrea Shepard, 1987. "Licensing to Enhance Demand for New Technologies," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 360-368, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nisvan Erkal, 2005. "Optimal Licensing Policy in Differentiated Industries," The Economic Record, The Economic Society of Australia, vol. 81(252), pages 51-60, March.
    2. Peter Thompson, 2012. "The Relationship between Unit Cost and Cumulative Quantity and the Evidence for Organizational Learning-by-Doing," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 203-224, Summer.
    3. Ana Espínola-Arredondo & Félix Muñoz-García, 2013. "Uncovering Entry Deterrence in the Presence of Learning-by-Doing," Journal of Industry, Competition and Trade, Springer, vol. 13(3), pages 319-338, September.
    4. Thompson, Peter, 2010. "Learning by Doing," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 429-476, Elsevier.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aidan Hollis, 1996. "Subsidizing the Competition," Working Papers ecpap-96-02, University of Toronto, Department of Economics.
    2. Jean-François Sattin, 2016. "Exploring the survival of patent licensing: some evidence from French foreign agreements," The Journal of Technology Transfer, Springer, vol. 41(3), pages 610-630, June.
    3. Arijit Mukherjee, 2014. "Licensing under convex costs," Journal of Economics, Springer, vol. 111(3), pages 289-299, April.
    4. Almeida Costa, Luis & Dierickx, Ingemar, 2002. "Licensing and bundling," International Journal of Industrial Organization, Elsevier, vol. 20(2), pages 251-267, February.
    5. Preet S Aulakh & Marshall S Jiang & Yigang Pan, 2010. "International technology licensing: Monopoly rents, transaction costs and exclusive rights," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(4), pages 587-605, May.
    6. Sorek, Gilad, 2012. "Free licensing to boost aggregate odds for success," Economics Letters, Elsevier, vol. 116(2), pages 183-185.
    7. Corinne Langinier & Caroline Boivin, 2005. "Technology Licensing to a Rival," Economics Bulletin, AccessEcon, vol. 12(15), pages 1-8.
    8. repec:ebl:ecbull:v:12:y:2005:i:15:p:1-8 is not listed on IDEAS
    9. Nisvan Erkal, 2005. "Optimal Licensing Policy in Differentiated Industries," The Economic Record, The Economic Society of Australia, vol. 81(252), pages 51-60, March.
    10. Arora, Ashish, 1998. "Licensing in the presence of competing technologies," DEE - Working Papers. Business Economics. WB 6532, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    11. Kim, YoungJun & Vonortas, Nicholas S., 2006. "Technology licensing partners," Journal of Economics and Business, Elsevier, vol. 58(4), pages 273-289.
    12. Marius F. Niculescu & D. J. Wu & Lizhen Xu, 2018. "Strategic Intellectual Property Sharing: Competition on an Open Technology Platform Under Network Effects," Information Systems Research, INFORMS, vol. 29(2), pages 498-519, June.
    13. Yi, Sang-Seung, 1999. "Entry, licensing and research joint ventures," International Journal of Industrial Organization, Elsevier, vol. 17(1), pages 1-24, January.
    14. Cabaleiro, Goretti, 2019. "Sources of appropriation capacity in licensing agreements," Technovation, Elsevier, vol. 86, pages 48-61.
    15. Pradeep K. Chintagunta & Marco Shaojun Qin & Maria Ana Vitorino, 2018. "Licensing and Price Competition in Tied-Goods Markets: An Application to the Single-Serve Coffee System Industry," Marketing Science, INFORMS, vol. 37(6), pages 883-911, November.
    16. Leon Yang Chu & Yunzeng Wang, 2015. "Bundled Procurement for Technology Acquisition and Future Competition," Manufacturing & Service Operations Management, INFORMS, vol. 17(2), pages 249-261, May.
    17. Derek Clark & Øystein Foros & Jan Sand, 2011. "Foreclosure in contests," Public Choice, Springer, vol. 148(1), pages 215-232, July.
    18. Gambardella, Alfonso & Giuri, Paola & Luzzi, Alessandra, 2007. "The market for patents in Europe," Research Policy, Elsevier, vol. 36(8), pages 1163-1183, October.
    19. Wang, Wei & Lyu, Gaoyan & Cui, Wei & Li, Yongjian, 2021. "Strategic technology commercialization in the supply chain under network effects," International Journal of Production Economics, Elsevier, vol. 231(C).
    20. Economides, Nicholas, 1996. "Network externalities, complementarities, and invitations to enter," European Journal of Political Economy, Elsevier, vol. 12(2), pages 211-233, September.
    21. Matutes, Carmen & Regibeau, Pierre, 1996. "A selective review of the economics of standardization. Entry deterrence, technological progress and international competition," European Journal of Political Economy, Elsevier, vol. 12(2), pages 183-209, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:157-174. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIJB20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.