Online applications and services automate communications and transactions between firms and consumers, promising large efficiency gains. However, consumers have been slow to use these online technologies intensively, despite widespread adoption of the internet. Customers frequently undergo a staggered adoption process that may involve sign-up, experimentation, trial, and substantial usage until they fully embrace internet services. We ask whether delays in moving through the initial stages of this adoption process contribute to consumers ultimately not using the service intensively. Such behavior would be consistent with laboratory findings on consumer memory. We explore this question using data from a German retail bank where only 24% of the customers who sign up for the bank's online banking service use it substantially. We use exogenous variation in delays in the adoption process, caused by vacations and public holidays in different German states, to identify this effect. We find that delays in the early stages of adoption significantly reduce a customer's probability of moving to substantial usage: A 10-day delay of a customer's first online login reduces the likelihood that she will ever use the technology substantially, by 33%. This effect is more severe for demographic groups with less online experience.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by NET Institute in its series Working Papers with number
07-40.
Find related papers by JEL classification: M3 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising M30 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - General M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
This paper has been announced in the following NEP Reports:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)