Mitsuru (Michi) Igami, associate professor at Yale Department of Economics, empirically studies strategic industry dynamics.

TOPICS: (i) innovation, (ii) mergers, (iii) cartels, and (iv) artificial intelligence.

FIELDS: Industrial Organization, Economics of Innovation, International Trade.


Curriculum Vitae: html & pdf


Data, Society, and Inference Seminar Series, Stanford GSB (10/8)

Mannheim University's Conference on Mergers in Frankfurt, Germany (11/30–12/1)

CERGE-EI, Prague, Czech Republic (12/3)

North American Winter Meeting 2019 of the Econometric Society, Atlanta (1/4–6/2019)

Yonsei University (6/12/2019)

Korea University (6/13/2019)

Seoul National University (6/14/2019)

HEC Lausanne, Switzerland (6/28/2019)


  1. "Industry Dynamics of Offshoring: The Case of Hard Disk Drives," American Economic Journal: Microeconomics, 10:1 (February 2018), 67–101. [Video by AEA's Diana Schoder]. 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.
  2. "Estimating the Innovator’s Dilemma: Structural Analysis of Creative Destruction in the Hard Disk Drive Industry, 1981–1998," the Journal of Political Economy, 125:3 (June 2017), 798–847. [SSRN working paper version]. 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 data set 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.
  3. "Unobserved Heterogeneity in Dynamic Games: Cannibalization and Preemptive Entry of Hamburger Chains in Canada," with Nathan Yang, Quantitative Economics, 7:2 (July 2016), 483–521. 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.
  4. "Market Power in International Commodity Trade: The Case of Coffee," the Journal of Industrial Economics, 63:2 (June 2015), 225–248. [SSRN working paper 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."
  5. "Does Big Drive Out Small? - Entry, Exit, and Differentiation in the Supermarket Industry," the Review of Industrial Organization, 38:1 (January 2011), 1-21. 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.


  1. "Mergers, Innovation, and Entry-Exit Dynamics: Consolidation of the Hard Disk Drive Industry, 1996–2016," with Kosuke Uetake (September 4, 2017), revision & re-submission invited by the Review of Economic Studies. 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 six or fewer firms exist, highlighting a dynamic welfare tradeoff between ex-post pro-competitive effects and ex-ante value-destruction side effects.
  2. "Privatization and Productivity in China," with Yuyu Chen, Masayuki Sawada, and Mo Xiao (October 26, 2018). We study how changes in ownership affect the productivity of firms. Privatization of state-owned enterprises (SOEs) was a major economic reform during China's rapid growth, but its true impact remains controversial. Although private firms seem more productive than SOEs, the government selectively privatized (or liquidated) non-performing SOEs, which complicates the measurement of productivity. We address this selection problem by incorporating endogenous ownership change into a nonparametric estimation method and exploiting a lag structure in data. Results suggest privatization conferred both short-run and long-run productivity gains. The private-SOE productivity gap is larger among older firms and in less economically liberal regions.
  3. "Measuring the Incentive to Collude: The Vitamin Cartels, 1990–1999," with Takuo Sugaya (November 5, 2018). Do mergers help or hinder collusion? This paper studies the stability of the vitamin cartels in the 1990s and presents a repeated-games approach to quantify "coordinated effects" of a merger. We use data and direct evidence from American courts and European agencies to show the incentive compatibility constraint (ICC) of the short-lived vitamin C cartel was violated when it actually collapsed in 1995, whereas the ICCs of the long-lived cartels (vitamins A and E, and beta carotene) were satisfied until the prosecution in 1999. Simulations suggest a hypothetical merger could have prolonged the vitamin C cartel. Both the direction and magnitude of coordinated effects critically depend on firms' cost asymmetry and the size of synergy in a non-monotonic manner, highlighting the desirability of quantitative analysis.
  4. "Artificial Intelligence as Structural Estimation: Economic Interpretations of Deep Blue, Bonanza, and AlphaGo," (March 1, 2018). Artificial intelligence (AI) has achieved superhuman performance in a growing number of tasks, but understanding and explaining AI remain challenging. This paper clarifies the connections between machine-learning algorithms to develop AIs and the econometrics of dynamic structural models through the case studies of three famous game AIs. Chess-playing Deep Blue is a calibrated value function, whereas shogi-playing Bonanza is an estimated value function via Rust's (1987) nested fixed-point method. AlphaGo's "supervised-learning policy network" is a deep neural network implementation of Hotz and Miller's (1993) conditional choice probability estimation; its "reinforcement-learning value network" is equivalent to Hotz, Miller, Sanders, and Smith's (1994) conditional choice simulation method. Relaxing these AIs' implicit econometric assumptions would improve their structural interpretability.


  1. Acquiring a String of Pearls (with Yasin Özcan & Yasuaki Hiraoka), since June 2015.
  2. Moore's Law, since June 2013.
  3. Patent Statistics as an Innovation Indicator? Evidence from the Hard Disk Drive Industry, with Jai Subrahmanyam (January 9, 2015).
  4. Age, Experience, and Artistic Creativity: the Case of Weekly Jump (March 2012).