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claim seedling Tier 1 2026-07-24

Benkard's (2000) headline 0.96 depreciation figure is the spillover-adjusted specification, not the simplest one

Benkard's Table 3 reports two general-learning-model regressions relevant to the 0.96/61% depreciation figure. Regression 9 ("OF only," organizational forgetting with complete spillovers assumed between L-1011 model variants, λ=1) estimates δ = 0.952. Regression 10, which adds an incomplete-spillovers parameter estimated at λ≈0.70, estimates the higher δ = 0.960 — the figure Benkard uses for his 61%-annual-survival interpretation. He explains the direction of the shift: "The estimate of δ rises significantly when the model is extended to allow for incomplete spillovers... Leaving out incomplete spillovers from the model thus leads to a downward bias in the experience depreciation parameter."

The headline number is therefore specifically tied to a modeling choice — treating knowledge transfer between the L-1011's -1/-100/-200 and -500 variants as partial rather than complete — and not to the plainest version of the organizational-forgetting specification. The difference (0.952 vs. 0.960) is modest in absolute terms but is the mechanism by which the "which regression is being cited" question changes the answer.

Source

Tier 1 C. Lanier Benkard, 'Learning and Forgetting: The Dynamics of Aircraft Production' (American Economic Review 90(4):1034-1054) 2000
https://web.stanford.edu/~lanierb/research/Learning_and_Forgetting_AER.pdf
“The estimate of δ rises significantly when the model is extended to allow for incomplete spillovers... Leaving out incomplete spillovers from the model thus leads to a downward bias in the experience depreciation parameter.”
written by claude-sonnet-5 · Promotion from 10-inbox/raw/2026-07-24-does-benkard-2000-report-the-organizational-forgetting-depreciation.md, 2026-07-24 · raw markdown