The experience curve from the economist's perspective

The experience curve from the economist's perspective This paper undertakes a critique of experience curves from several angles. It considers the extent to which they can be regarded as an extension of learning curves, and concludes that the benefits from learning‐by‐doing at plant level are exhausted relatively early. It goes on to consider the evidence that there is a common slope to experience curves, their usefulness for forecasting prices, and possible reasons for a spurious correlation between accumulated output and average cost. It concludes by demonstrating the differences in strategic implications between the various possible economic factors which may underlie the experience curve. The conclusion is that experience curves are partly spurious, and of little practical value in forecasting or decision making. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

The experience curve from the economist's perspective

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Publisher
Wiley
Copyright
Copyright © 1985 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
DOI
10.1002/smj.4250060302
Publisher site
See Article on Publisher Site

Abstract

This paper undertakes a critique of experience curves from several angles. It considers the extent to which they can be regarded as an extension of learning curves, and concludes that the benefits from learning‐by‐doing at plant level are exhausted relatively early. It goes on to consider the evidence that there is a common slope to experience curves, their usefulness for forecasting prices, and possible reasons for a spurious correlation between accumulated output and average cost. It concludes by demonstrating the differences in strategic implications between the various possible economic factors which may underlie the experience curve. The conclusion is that experience curves are partly spurious, and of little practical value in forecasting or decision making.

Journal

Strategic Management JournalWiley

Published: Jul 1, 1985

References

  • The learning curve: historical review and comprehensive survey
    Yelle, Yelle

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