| In the first chapter, I develop theoretical and empirical tools to detect strategic behavior in the determination of equilibrium technology adoption times for firms in oligopolistic industries, and I apply these tools in an empirical application. In certain specific empirical applications, a researcher in possession of these tools may test among a number of competing theories of technology adoption, both strategic and non-strategic. It is possible to distinguish among theories characterized by collusion, precommitment, preemption, network externalities, and bandwagon effects. I use the tools developed to test among these competing theories on a sample of hospitals contemplating the adoption of a medical technology, magnetic resonance imaging. The sample consists of primary data collected by the author for all hospital duopoly markets in the U. S. I find evidence that strategic considerations affected the adoption of this technology in these markets and that the strategic interaction took the form of preemptive acquisition. In the second chapter, I use simulation methods to estimate a structural model of preemptive technology adoption in hospital duopoly markets. Using this model and auxiliary knowledge about the innovation, I am able to bound the welfare losses accruing from the preemptive nature of the competition. The point estimate of the upper bound on welfare losses is 2.8%. For most of the sample, adoptions happened not more than about one year earlier than the optimal adoption dates. Additionally, for most of the sample, the majority of the welfare losses from early adoption occur as a result of the first firm adopting too early in opting too early in equilibrium. |