“…Our results contribute to the literature on learning and hedonic price model in the following aspects. We are the first to find empirical evidence on the reduction in marginal cost of production in real asset markets, which is consistent with the concept of “learning‐by‐doing” (Fudenberg and Tirole 1983), learning and experience curves (Millians 2011), diffusion of knowledge and service (Nemet 2006, Rao and Kishore 2010, Millians 2011, Yeh and Rubin 2012) and organizational learning in dynamic business environments and evolving competitive forces (Pettigrew and Whipp 1991, Barlow and Jashapara 1998). Second, we identify new instruments for the supply equations taking into account heterogeneity in developers’ characteristics.…”