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Learning-by-Doing with Spillovers in Competitive Industries, Free Entry, and Regulatory Policy

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  • Bläsi, Albrecht
  • Requate, Till

Abstract

We study the impact of learning-by-doing with spillovers in competitive markets with free market entry. Within a two period model, we consider first the case where fixed costs are incurred only once, and entry is once and for all. In the second case fixed costs are incurred in each period, and both market exit after the first period and late entry in the second period is possible. For the first case first best allocations can only be decentralized by subsidizing output in the first period and additionally paying an entry premium. If exit and late entry are possible and if market exit by some firms is socially optimal, the optimal policy scheme requires a nonlinear output subsidy which serves to discriminate between exiting and staying firms. We further investigate the comparative statics effects of the different policy instruments.

Suggested Citation

  • Bläsi, Albrecht & Requate, Till, 2005. "Learning-by-Doing with Spillovers in Competitive Industries, Free Entry, and Regulatory Policy," Economics Working Papers 2005-09, Christian-Albrechts-University of Kiel, Department of Economics.
    • Handle: RePEc:zbw:cauewp:3195
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    References listed on IDEAS

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    Cited by:

    1. Joan Canton & Åsa Johannesson Lindén, 2010. "Support schemes for renewable electricity in the EU," European Economy - Economic Papers 2008 - 2015 408, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Lancker, Kira & Quaas, Martin F., 2019. "Increasing marginal costs and the efficiency of differentiated feed-in tariffs," Energy Economics, Elsevier, vol. 83(C), pages 104-118.
    3. Bläsi, Albrecht & Requate, Till, 2007. "Subsidies for Wind Power: Surfing down the Learning Curve?," Economics Working Papers 2007-28, Christian-Albrechts-University of Kiel, Department of Economics.
    4. Lehmann, Paul, 2009. "Climate Policies with Pollution Externalities and Learning Spillovers," MPRA Paper 21353, University Library of Munich, Germany.
    5. Thure Traber & Claudia Kemfert, 2011. "Subsidies for Learning in Renewable Energy Technologies under Market Power and Emission Trading," Discussion Papers of DIW Berlin 1126, DIW Berlin, German Institute for Economic Research.

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    More about this item

    Keywords

    learning-by-doing; spillovers; regulatory policy;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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