Prices, costs, and competition at the technology frontier: A model for semiconductor memories

Economic competition, both internationally and within national borders, is being profoundly affected by relative ability to participate in markets with short product cycles and significant learning periods. However, effective tools for examining policies in this context have yet to be developed. This paper attempts a first step by presenting an empirical model for the semiconductor memory industry. As an illustration, the model is used to analyze recent developments in the competition between U.S. and Japanese producers.