Leaming-by-doing and increasing returns are often perceived to have similar implications for market structure and conduct. We analyse this in the context of an infinite-horizon price-setting game. Learning is shown to not reduce the viability of market-sharing collusion between a given number of firms, whereas intra-period increasing returns invariably does. We subsequently develop a model where the number of active firms is determined endogenously, under the assumption that the post-entry game is collusive. In this model, learning has no effect on concentration, while scale economies increase concentration.
|Original language||English (US)|
|Number of pages||17|
|Journal||Review of Economic Studies|
|State||Published - Oct 1991|
ASJC Scopus subject areas
- Economics and Econometrics