Arrow's Learning By Doing is a concept introduced by economist Kenneth Arrow, emphasizing the importance of experience in the learning process. The idea suggests that as individuals or firms engage in production or tasks, they accumulate knowledge and skills over time, leading to increased efficiency and productivity. This learning occurs through trial and error, where the mistakes made initially provide valuable feedback that refines future actions.
Mathematically, this can be represented as a positive correlation between the cumulative output and the level of expertise , where increases with each unit produced:
where is a function representing learning. Furthermore, Arrow posited that this phenomenon not only applies to individuals but also has broader implications for economic growth, as the collective learning in industries can lead to technological advancements and improved production methods.
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