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Mitsuru (Michi) IGAMI, an Assistant Professor of Economics at Yale Department of Economics, empirically studies strategic industry dynamics, including (i) innovation & productivity, (ii) entry & exit, (iii) mergers & acquisitions, and (iv) cartels & collusion.

  • Industrial Organization, Economics of Innovation, International Trade

  • 9/20/2016 U Maryland"Mergers, Innovation, and Entry-Exit Dynamics"
  • 9/21/2016 U.S. Department of Justice"Mergers, Innovation, and Entry-Exit Dynamics"
  • 9/22/2016 Bates White: "Mergers, Innovation, and Entry-Exit Dynamics"
  • 10/28/2016 Japan Fair Trade Commission"Mergers, Innovation, and Entry-Exit Dynamics"
  • 12/12/2016 MIT"Mergers, Innovation, and Entry-Exit Dynamics"
  • 4/19/2017 Georgetown U"Mergers, Innovation, and Entry-Exit Dynamics"
  • 5/3/2017 Cornell"Mergers, Innovation, and Entry-Exit Dynamics"

  • Estimating the Innovator’s Dilemma: Structural Analysis of Creative Destruction in the Hard Disk Drive Industry, 1981–1998, 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 with Nathan Yang  (July 2016, Quantitative Economics, 7:2, 483–521). 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.


  • Measuring the Incentive to Collude: The Vitamin Cartels, 1990–1999 (December 24, 2016) with Takuo Sugaya. 

    Why do some cartels survive for a decade but others collapse within a few years? We study one of the most prominent cases in recent history, the vitamin cartels, to quantify the member firms' incentives to collude. American court documents and European criminal investigation provide direct evidence on the cartels' organization as well as the leading firms' internal cost data, which we analyze within a standard repeated game framework. Preliminary results suggest the cartel leader's incentive diminished significantly at the time of the Vitamin C cartel's actual collapse in 1995, mainly because of growing supply from fringe competitors in China, whereas the markets for Beta Carotene, Vitamin A, and Vitamin E remained stable. We also find that the BASF-Takeda merger in 2001, if consummated a decade earlier, would have prolonged the Vitamin C cartel.

  • Mergers, Innovation, and Entry-Exit Dynamics: Consolidation of the Hard Disk Drive Industry, 1996–2015 (July 28, 2016) with Kosuke Uetake. Slides Slides2

    How far should an industry be allowed to consolidate when competition and innovation are endogenous? We extend Rust's (1987) framework to incorporate a stochastically alternating-move game of dynamic oligopoly, and estimate it using data from the hard disk drive industry, in which a dozen global players consolidated into only three in the last 20 years. We find plateau-shaped equilibrium relationships between competition and innovation, with systematic heterogeneity across time and productivity. Our counterfactual simulations suggest the optimal policy should stop mergers when five or fewer firms exist, highlighting a dynamic welfare tradeoff between ex-post pro-competitive effects and ex-ante value-destruction side effects.

  • Privatization and Productivity in China (December 16, 2016) with Yuyu Chen, Masayuki Sawada, and Mo Xiao. Slides 

    Massive privatization of state-owned enterprises (SOEs) since the late 1990s has been credited as a major source of China's productivity growth, but the literature has not formally incorporated privatization. We augment Ackerberg, Caves, and Frazer's (2015) model to estimate the TFP impacts of ownership types and its transition dynamics. Results suggest private firms are 192% more efficient than SOEs. Although privatized SOEs do not achieve this gain overnight, they may close most of the gap within six years on average. We also find the private TFP premium is larger in the final good sector and smaller in "strategic" (i.e., heavily regulated) industries including petroleum, metals, and car manufacturing.

  • Industry Dynamics of Offshoring: The Case of Hard Disk Drives (October 12, 2016), third revision requested by 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.