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Innovation and Adoption of Electronic Business Technologies

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  • Kai Sülzle

Abstract

This paper presents a duopoly model of e-business technology adoption. A leader and a follower benefit from a new e-business technology with uncertain quality depending on its innovation and adoption cost and both firms’ adoption timing. When innovation and adoption require large set-up costs, the leader favors quick adoption by the follower. The follower prefers either late or no adoption. This is due to a delayed first-mover benefit which stems from an innovators’ capability to impose a new technology standard. It is shown that inter-firm adoption subsidies are a viable tool to quicken adoption.

Suggested Citation

  • Kai Sülzle, 2006. "Innovation and Adoption of Electronic Business Technologies," ifo Working Paper Series 38, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    • Handle: RePEc:ces:ifowps:_38
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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