Competition, Procurement and Learning-By-Doing in the Space Launch Industry

We estimate a dynamic model of the U.S. space launch industry.The model allows past launches to improve rocket reliability and lower launch costs.It also allows the government to make forwardlooking procurement choices.We use the model to analyze policy-relevant issues in the recent history of the industry: the 2006 United Launch Alliance "merger-to-monopoly" and the effects of efficiencies in the form of learning synergies; innovations, such as SpaceX's Falcon 9 and ULA's recent introduction of Vulcan Centaur; the costs and benefits of forward-looking procurements; and, the trade-offs between the advantages of centralized control and possible inefficiencies.