The production recipes approach to modeling technological innovation: An application to learning by doing

We do two things in this paper. First, we put forward some elements of a mi croeconomic theory of technological evolution. This involves adding nascent (essentially undiscovered) technologies to the existing technologies of ne oclassical production theory, and, more importantly, expanding the notion o f the production plan to include the recipe - the complete description of t he underlying engineering process. Second, we use the recipes approach in c onstructing a simple microeconomic model of shop-floor learning by doing. W e simulate the dynamics of the model and report the effects of changes in t he basic parameters on the resulting engineering experience curves. For cor rectly chosen values of these parameters, the predictions of the model matc h the observed experience curves. (C) 2000 Elsevier Science B.V. All rights reserved.