Stuck in the Adoption Funnel: The Effect of Delays in the Adoption Process on Ultimate Adoption
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.
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.:
- David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, vol. 80(2), pages 355-361, May.
- MartinNeil Baily & Robert Z. Lawrence, 2001.
"Do We Have a New E-conomy?,"
American Economic Review,
American Economic Association, vol. 91(2), pages 308-312, May.
- Martin N. Baily & Robert Lawrence, 2001. "Do We Have A New E-Conomy?," NBER Working Papers 8243, National Bureau of Economic Research, Inc.
- Sarv Devaraj & Rajiv Kohli, 2003. "Performance Impacts of Information Technology: Is Actual Usage the Missing Link?," Management Science, INFORMS, vol. 49(3), pages 273-289, March.
- Robert J. Gordon, 2000. "Does the "New Economy" Measure Up to the Great Inventions of the Past?," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 49-74, Fall.
- Robert J. Gordon, 2000. "Does the "New Economy" Measure up to the Great Inventions of the Past?," NBER Working Papers 7833, National Bureau of Economic Research, Inc.
- Gordon, Robert J, 2000. "Does the 'New Economy' Measure up to the Great Inventions of the Past?," CEPR Discussion Papers 2607, C.E.P.R. Discussion Papers.
- Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 339-376.
- Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 1999. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence," NBER Working Papers 7136, National Bureau of Economic Research, Inc.
- David Hirshleifer & Ivo Welch, 2002. "An Economic Approach to the Psychology of Change: Amnesia, Inertia, and Impulsiveness," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(3), pages 379-421, 09.
- David Hirshleifer & Ivo Welch, 2001. "An Economic Approach to the Psychology of Change: Amnesia, Inertia, and Impulsiveness," Yale School of Management Working Papers ysm185, Yale School of Management, revised 01 Aug 2009.
- David Hirshleifer & Ivo Welch, 2001. "An Economic Approach to the Psychology of Change: Amnesia, Inertia, and Impulsiveness," Cowles Foundation Discussion Papers 1306, Cowles Foundation for Research in Economics, Yale University.
- Bijwaard, G.E., 2007. "Instrumental variable estimation of treatment effects for duration outcomes," Econometric Institute Research Papers EI 2007-20, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Bijwaard, Govert, 2007. "Instrumental Variable Estimation of Treatment Effects for Duration Outcomes," IZA Discussion Papers 2896, Institute for the Study of Labor (IZA).
- Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
- Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers 0118, National Bureau of Economic Research, Inc.
- Fred D. Davis & Richard P. Bagozzi & Paul R. Warshaw, 1989. "User Acceptance of Computer Technology: A Comparison of Two Theoretical Models," Management Science, INFORMS, vol. 35(8), pages 982-1003, August.
- Erik Brynjolfsson & Lorin M. Hitt, 2003. "Computing Productivity: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 793-808, November.
- Brynjolfsson, Erik & Hitt, Lorin M., 2004. "Computing Productivity: Firm-Level Evidence," Working papers 4210-01, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Greenleaf, Eric A & Lehmann, Donald R, 1995. " Reasons for Substantial Delay in Consumer Decision Making," Journal of Consumer Research, Oxford University Press, vol. 22(2), pages 186-199, September.
- Felix Oberholzer-Gee & Koleman Strumpf, 2007. "The Effect of File Sharing on Record Sales: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 115, pages 1-42.
- Goldfarb, Avi & Prince, Jeff, 2008. "Internet adoption and usage patterns are different: Implications for the digital divide," Information Economics and Policy, Elsevier, vol. 20(1), pages 2-15, March.
- Lorin M. Hitt & Frances X. Frei, 2002. "Do Better Customers Utilize Electronic Distribution Channels? The Case of PC Banking," Management Science, INFORMS, vol. 48(6), pages 732-748, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:net:wpaper:0740. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicholas Economides)
If references are entirely missing, you can add them using this form.