Parametric interdependence, learning-by-doing, and industrial structure

  • Authors:

  • William Martin Tracy;M. V. Kumar;William Paczkowski

  • Affiliations:

  • Lally School of Management and Technology, Rensselaer Polytechnic Institute, Troy, USA 12180;Lally School of Management and Technology, Rensselaer Polytechnic Institute, Troy, USA 12180;Lally School of Management and Technology, Rensselaer Polytechnic Institute, Troy, USA 12180

  • Venue:
  • Computational & Mathematical Organization Theory
  • Year:
  • 2013

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Abstract

We explore the proposition that parametric interdependence makes learning-by-doing a nondeterministic, path-dependent process. The implications of our model challenge two conventional beliefs about the relationships between industrial structure, spillovers, and learning-by-doing. First, we challenge the belief that the monopolistic industrial structure always maximizes learning-by-doing gains when there are no spillovers. Second, we challenge the belief that increasing spillovers unambiguously increases welfare when learning-by-doing drives innovation.