Identifying the Demand for Features: An Application to Mainframe Computers

This paper examines the mainframe computer market from 1985-1991 and attempts to identify the types of buyers that demand particular computer features, such as speed and memory. To identify these buyers, demand for computer characteristics is estimated using a demand model based on Rosen (1974). Through these demand estimates we are able to show that the advent of on-line transactions processing was pushing the demand for computer speed and memory to some extent. However, beyond this specialized application, only a few industries seemed to be demanding the newest technology, while the majority of buyers continued to buy small mainframes throughout the sample period.