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Title:The impact of competition on technology adoption: An apples-to-PCs analysis PDF Logo
Authors:Copeland, Adam
Shapiro, Adam Hale
Issue Date:2010
Series/Report no.:Staff Report, Federal Reserve Bank of New York 462
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 vintagecapital 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.
Subjects:Innovation
market structure
computers
JEL:D40
L10
L63
O30
Document Type:Working Paper
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

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