Entry, Exit, and Diffusion with Learning by Doing.

Boyan Jovanovic, Saul Lach*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Early entry has the advantage of higher revenues per unit of output early on. Late entry has the benefit of learning from the experience of earlier entrants, and hence lower production costs. These advantages are balanced off in a continuous time perfect foresight equilibrium. Competition generates S-shaped diffusion, and staggered entry and exit. A monopolist will innovate less than a competitive industry, but the innovation that he does do, he will do sooner.
Original languageEnglish
Pages (from-to)690-699
Number of pages10
JournalAmerican Economic Review
Issue number4
StatePublished - 1 Sep 1989


  • Industrial organization (Economic theory)
  • Technological innovations
  • Barriers to entry (Industrial organization)
  • Monopolies
  • Industrial costs
  • Economic equilibrium
  • Competition


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