Technology Diffusion and Market Structure: Evidence from Infertility Treatment Markets

36 Pages Posted: 9 Oct 2005

See all articles by Barton H. Hamilton

Barton H. Hamilton

Washington University, Saint Louis - John M. Olin School of Business

Brian McManus

University of North Carolina (UNC) at Chapel Hill - Department of Economics

Date Written: September 2005

Abstract

We study how market structure influenced the diffusion of new treatment technology (ICSI) among U.S. fertility clinics that performed in vitro fertilization (IVF). We find that competitive (i.e., non-monopoly) markets were more likely to have a clinic that offered ICSI than monopoly markets. Our results account for the potential endogeneity of market structure with respect to entry-foreclosing technology adoption and unobserved market characteristics that might increase the return from offering ICSI. We also provide evidence that ICSI diffused faster to competitive markets because the returns from the new technology were greater there. Early-adopting clinics in competitive markets experienced a significant increase in size, while early-adopting monopoly clinics did not. However, monopoly clinics that adopted ICSI soon after its invention were more likely to delay the entry of rival firms than monopolists that adopted ICSI later.

Keywords: Technology diffusion, technology adoption, new products, competition, in vitro fertilization (IVF), infertility treatment

JEL Classification: D43, I11, L13, O33

Suggested Citation

Hamilton, Barton H. and McManus, Brian, Technology Diffusion and Market Structure: Evidence from Infertility Treatment Markets (September 2005). Available at SSRN: https://ssrn.com/abstract=813826 or http://dx.doi.org/10.2139/ssrn.813826

Barton H. Hamilton

Washington University, Saint Louis - John M. Olin School of Business ( email )

One Brookings Drive, Campus Box 1133
St. Louis, MO 63130-4899
United States
314-935-8057 (Phone)
314-935-6359 (Fax)

HOME PAGE: http://www.olin.wustl.edu/faculty/hamiltonb/

Brian McManus (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Chapel Hill, NC 27599
United States

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