(Michi) IGAMI is an Assistant Professor of Economics at Yale Department of Economics, and empirically studies the economics of creative destruction with emphasis on strategic industry dynamics, including (i) innovation & productivity, (ii) entry & exit, and (iii) mergers & acquisitions.

  • Industrial Organization, Economics of Innovation, International Trade


  • Estimating the Innovator’s Dilemma: Structural Analysis of Creative Destruction in the Hard Disk Drive Industry, 1981–1998 (October 14, 2015), the Journal of Political Economy, forthcoming. Slides  

    This paper studies strategic industry dynamics of creative destruction in which firms and technologies experience turnover. Theories predict cannibalization between existing and new products delays incumbents’ innovation, whereas preemptive motives accelerate it. Incumbents’ cost (dis)advantage relative to that of entrants would further reinforce these tendencies. To empirically assess these three forces, I develop and estimate a dynamic oligopoly model using a unique panel dataset of hard disk drive (HDD) manufacturers (1981–98). The results suggest that despite strong preemptive motives and a substantial cost advantage over entrants, cannibalization makes incumbents reluctant to innovate, which can explain at least 57% of the incumbent-entrant innovation gap. I then assess hypothetical policy interventions concerning broad patents and license fees, and find the industry’s welfare trajectory difficult to outperform.

    * Non-technical summary in Japanese
     at Nikkei Business (Online & Paper editions, January 5 & April 14, 2015)

  • Unobserved Heterogeneity in Dynamic Games: Cannibalization and Preemptive Entry of Hamburger Chains in Canada (September 2, 2015) with Nathan Yang, Quantitative Economics, forthcoming. Slides  

  • We develop a dynamic entry model of multi-store oligopoly with heterogeneous markets, and estimate it using data on hamburger chains in Canada (1970–2005). Because more lucrative markets attract more entry, firms appear to favor the presence of more rivals. Thus unobserved heterogeneity across geographical markets creates an endogeneity problem and poses a methodological challenge in the estimation of dynamic games, which we address by combining the procedures proposed by Kasahara and Shimotsu (2009), Arcidiacono and Miller (2011), and Bajari, Benkard, and Levin (2007), respectively. The results suggest the omission of unobserved market heterogeneity attenuates the estimates of competition, and the tradeoff between cannibalization and preemption is an important factor behind the evolution of market structure.

    * This paper has previously been circulated under a different title, "Cannibalization and Preemptive Entry in Heterogeneous Markets."
    * Non-technical summary by The Economist (May 3, 2014)
    * Non-technical summary by Tim Harford (The Undercover Economist) for The Financial Times (February 6, 2015)

  • Market Power in International Commodity Trade: The Case of Coffee (June 2015, the Journal of Industrial Economics, 63:2, 225–248). Slides  Published version 
This paper studies the impact of market power on international commodity prices. I use a standard oligopoly model and exploit historical variations in the structure of the international coffee bean market to assess the impact of a cartel treaty on coffee prices and its global welfare consequences. The results suggest the International Coffee Agreement (ICA, 1965-89) raised its price by 75% above the Cournot-competitive level, annually transferring approximately $12 billion from consumers to exporting countries, and its lapse in 1989 explains four-fifths of the subsequent price decline, that is, the "coffee crisis."
This paper measures the impact of the entry of large supermarkets on incumbents of various sizes. Contrary to the conventional notion that big stores drive small rivals out of the market, data from Tokyo in the 1990s show that large supermarkets' entry induces the exit of existing large and medium-size competitors, but improves the survival rate of small supermarkets. These findings highlight the role of store size as an important dimension of product differentiation. Size-based entry regulations would appear to protect big incumbents, at the expense of small incumbents and potential entrants.


  • Privatization and Innovation: Productivity, New Products, and Patents in China (November 17, 2015) with Mo Xiao and Yuyu Chen). Slides

    We study Chinese firms' innovative activities in the period of privatization. We use Ackerberg, Caves, and Frazer's (forthcoming) method to estimate TFP, which suggests domestic private firms' average TFP converged with that of foreign firms, whereas that of state-owned enterprises lagged behind. We then investigate the relationships between our TFP estimates and other, observed measures of innovation, including the introduction of new products and patent applications. We find: (1) process and product innovations seem complementary to each other, (2) "invention" patents appear more reliable as an indicator of innovations than the other types of Chinese patents, and (3) patenting behaviors are highly heterogeneous across firms of different ownership types.

  • Mergers, Innovation, and Entry-Exit Dynamics: The Consolidation of the Hard Disk Drive Industry, 1996–2015 (October 30, 2015) with Kosuke Uetake. Slides Poster

    We study the process of industry consolidation with endogenous mergers, innovation, and entry-exit. We develop an empirical model of a dynamic game with a random proposer of merger in each period, and estimate it using data from the hard disk drive industry. We …find mergers became a dominant mode of exit and sometimes generated productivity improvement (i.e., synergies). Our counterfactual simulations feature antitrust policy regimes with alternative tolerance levels of mergers, and highlight a dynamic welfare tradeoff between the ex-post pro-competitive effects of blocking mergers and its negative side effects due to the destruction of ex-ante option values. The results suggest approximately four firms as the optimal regulatory threshold.

  • Industry Dynamics of Offshoring: The Case of Hard Disk Drives (February 29, 2016), first revision resubmitted to American Economic Journal: Microeconomics. Slides

    This paper uncovers a novel pattern of offshoring dynamics in a high-tech industry, 
    and proposes a structural model to explain it. Specifically, the hard disk drive industry (1976–98) witnessed massive waves of entry, exit, and the relocation of manufacturing plants to low-cost countries, in which shakeouts occurred predominantly among home firms and almost all survivors were offshore firms. I build and estimate a dynamic offshoring game with entry/exit to measure the benefits and costs of offshoring, investigate the relationship between offshoring and market structure, and assess the impacts of hypothetical government interventions.

    * This paper has previously been circulated under different titles, "Offshoring under Oligopoly", "Offshoring as Process Innovation", and "Who Offshores, Where, and How?"
    * Presentation video at Chicago University's Becker Friedman Institute (April 2, 2015)

  • Patent Statistics as an Innovation Indicator? Evidence from the Hard Disk Drive Industry (January 9, 2015) with Jai SubrahmanyamSlides

    We assess the usefulness of patent statistics as an indicator of innovation using 
    a direct measure of innovation in the hard disk industry (1976–98). Three findings emerge: (1) patents “predict” innovations better than a random guess, and a simple refinement makes them more useful; (2) conditional on innovating, conglomerates and larger firms patent more than specialized startups and smaller firms; and (3) patent reforms seem to make the patent-innovation relationship nonstationary. These results suggest researchers to use caution when comparing patents of different types of firms and across years because ill-informed R&D policy interventions may entail detrimental impacts on economic growth and welfare.


  • Acquiring a String of Pearls (with Yasin Özcan), since June 2015.

  • Moore's Law, since June 2013.

  • This paper studies the effects of age and experience on creativity. I construct a unique panel dataset of 600 mangas and 286 artists from the population of works published at Weekly Jump (1968–2012). Preliminary data analysis suggests that: (1) creativity declines with age; (2) creativity increases with experience; and (3) the benefits of experience diminishes with age. However, these results might suffer from the survivorship bias because some artists quit their career at Weekly Jump after publishing a few unpopular mangas. Since only talented artists may choose to accumulate experience, my current estimates likely confound the effects of age and experience with that of unobserved talent. In the future version of this paper, I plan to address this selection issue by incorporating the dynamics of artists' career decisions into a structural model.

    * Click here in case you have not heard about Weekly Jump, one of the world's most prominent comic magazines.