The Learning Curve and Pricing in the Chemical Processing Industries
Volume: Volume 15, No. 2
Issue: Summer 1984
Pages: pp. 213-228
Authors: Marvin B. Lieberman
Title: The Learning Curve and Pricing in the Chemical Processing Industries
Abstract: Data on 37 chemical products are used to test a number of hypotheses about the learning curve and industrial price behavior. The results document a strong and consistent learning effect. Learning is found to be a function of cumulated industry output and cumulated investment rather than calendar time. Standard economies of scale appear significant but small in magnitude relative to the learning effect. Variations in the slope of the learning curve are linked to differences in R&D expenditures and capital intensity. Market concentration is found to be a strong influence on price flexibility and the timing of learning-related price changes.
JEL Classification
Market Structure: Industrial Organization and Corporate Strategy (6110)
Research and Development (6212)
Industry Studies Manufacturing Chemicals, Drugs, Plastics, Ceramics, Glass, Cement, and Rubber (6315)