This article develops a model of competitive interaction and industry evolution in the presence of a learning curve. The learning curve is a function relating the unit costs of the individual firm to accumulated volume. The responses of the model to shifts in parameters are explored through...

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Nobel Prize Lecture

I was born during the second World War in Montclair New Jersey. This was more or less an accident (the location that is). My father was based in Ottawa as a member of the War Time Prices and Trades Board, the Canadian version of wartime price controls. That work entailed frequent trips to...

Interviewers are Professor Karl-Gustaf Lofgren and Anne-Sophie Crepin, graduate student, Umea University.

The paper argues that entry is deterred in an industry when existing firms have enough capacity to make a new entrant unprofitable. This capacity need not be fully utilized in the absence of entry. This can result in larger costs than are necessary, given output levels. It also results in higher...