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To better understand the PLA's ability to employ its developing capabilities in a variety of potential scenarios, this volume examines how the PLA learns by doing, specifically through its exercises and noncombat operations at home and overseas, and through key logistical and theoretical developments. Key findings are: 1) recent PLA exercises and operations point to an increasing interest in developing expeditionary naval capabilities and a presence in distant seas, suggesting that a move beyond the current "near seas" focus is both possible and an extension of existing efforts ; 2) PLA ground force exercises -- rather than aiming to intimidate others by demonstrating the ability to project power beyond China's borders -- focus on moving military power within China, both to defend China's borders and perhaps as a prelude to military restructuring in which smaller but more mobile formations could replace larger and more static ones ; 3) through its participation in international military exercises as well as peacekeeping operations and humanitarian aid and disaster relief missions, the PLA is gaining greater capabilities to deploy outside of China's borders for a variety of missions ; and, 4) PLA operations are increasingly supported by a modern, civilian-integrated military logistics network, though a lack of overseas bases continues to limit the effectiveness of this network as it pertains to overseas power projection capabilities

We introduce learning by doing in a dynamic contest. Contestants compete in an early round and can use the experience gained to reduce effort cost in a subsequent contest. A contest designer can decide how much of the prize mass to distribute in the early contest and how much to leave for the later one in order to maximize total efforts. We show how this division affects effort at each stage, and present conditions that characterize the optimal split. There is a trade off here, since a large early prize increases first period efforts leading to a substantial reduction in second round effort cost; on the other hand, there is less of the prize mass to fight over in the second round, reducing effort at that stage. The results are indicative of the fact that the designer often prefers to leave most of the prize mass for the second contest to reap the gains from the learning by doing effect. Adapted from the source document.

AbstractWe analyse the competitive equilibrium and socially optimal allocation of production fragments in a two‐country model where there is learning by doing with spillovers between fragments in the home country. We distinguish between forward and backward knowledge linkages, where learning results from producing products that are less (more) complex than the current knowledge frontier with forward (backward) linkages. We compare the pattern of comparative advantage in the competitive and socially optimal cases, and compare the intensive and extensive margins of fragments produced at home in the two cases. We establish a sufficient condition for the range of fragments produced at home to be non‐decreasing with forward linkages. We also show that with backward linkages, the home country will produce some fragments in the neighbourhood of the steady state that are more complex than those produced in the steady state.