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The impact of competition on technology adoption: an apples-to-PCs analysis

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Abstract

We study the effect of market structure on a personal computer manufacturer?s decision to adopt new technology. This industry is unusual because there exist two horizontally segmented retail markets with different degrees of competition: the IBM-compatible (or PC) platform and the Apple platform. We first document that, relative to Apple, producers of PCs typically have more frequent technology adoption, shorter product cycles, and steeper price declines over the product cycle. We then develop a parsimonious vintage-capital model that matches the prices and sales of PC and Apple products. The model predicts that competition is the key driver of the rate at which technology is adopted.

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  • Adam Copeland & Adam Hale Shapiro, 2010. "The impact of competition on technology adoption: an apples-to-PCs analysis," Staff Reports 462, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:462
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    Cited by:

    1. Sukanto Bhattacharya & Surjasama Lahiri & Munirul Nabin, 2021. "A novel technology adoption in an OLG framework: examining the cross-generational effects of promotional policies," SN Business & Economics, Springer, vol. 1(4), pages 1-17, April.
    2. Rui Castro & Gian Luca Clementi & Yoonsoo Lee, 2015. "Cross Sectoral Variation in the Volatility of Plant Level Idiosyncratic Shocks," Journal of Industrial Economics, Wiley Blackwell, vol. 63(1), pages 1-29, March.
    3. Dae-Hwan Kim & Matarr O. Sambou & Moo-Sup Jung, 2016. "Does Technology Transfer Help Small and Medium Companies? Empirical Evidence from Korea," Sustainability, MDPI, vol. 8(11), pages 1-13, November.
    4. Slivko, Olga, 2012. "Direct and indirect subsidies in markets with system goods in the presence of externalities. Preliminary version," Working Papers 2072/211631, Universitat Rovira i Virgili, Department of Economics.
    5. Mykolas Simas Poškus & Lina Jovarauskaitė & Audra Balundė, 2021. "A Systematic Review of Drivers of Sustainable Wastewater Treatment Technology Adoption," Sustainability, MDPI, vol. 13(15), pages 1-11, July.
    6. Adam Hale Shapiro & Ana Aizcorbe, 2010. "Implications of Consumer Heterogeneity on Price Measures for Technology Goods," BEA Working Papers 0062, Bureau of Economic Analysis.

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    More about this item

    Keywords

    Computer industry; technological innovations; Competition;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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