Technological Stagnation or Rising Market Power?: Evidence from the Japanese Computer Hardware Industry

Yuta Takahashi, Naoki Takayama and Yuta Toyama

No 762, Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: Technological innovation in computer hardware, often measured by rapid decline in the relative price of computer hardware, significantly boosted productivity growth in the past. The massive decline in these relative prices stopped during the last two decades globally. To disentangle the causes behind recent price increases, we structurally estimate supply and demand model using detailed Japanese computer productlevel data from 2006 to 2015, and back out the marginal costs and markups. Our results indicate that price reductions in earlier sample period resulted from marginal cost decreases, while the price stabilization in later sample period reflects halted technological progress rather than increased market power. Recent PC market trends suggest genuine technological stagnation.

Keywords: Market Power; Markup; Computer Hardware; Demand Estimation (search for similar items in EconPapers)
Pages: 12 pages
Date: 2025-04
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hituec:762

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