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Innovation and Adoption of Electronic Business Technologies


  • Sülzle, Kai


This paper presents a duopoly model of e-business technology adoption. A leader and a follower benefit from a new ebusiness 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 firstmover 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

  • Sülzle, Kai, 2007. "Innovation and Adoption of Electronic Business Technologies," Dresden Discussion Paper Series in Economics 02/07, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
  • Handle: RePEc:zbw:tuddps:0207

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    References listed on IDEAS

    1. Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-841, August.
    2. Hoppe, Heidrun C, 2002. "The Timing of New Technology Adoption: Theoretical Models and Empirical Evidence," Manchester School, University of Manchester, vol. 70(1), pages 56-76, January.
    3. Geroski, P. A., 2000. "Models of technology diffusion," Research Policy, Elsevier, vol. 29(4-5), pages 603-625, April.
    4. Jensen, Richard, 1982. "Adoption and diffusion of an innovation of uncertain profitability," Journal of Economic Theory, Elsevier, vol. 27(1), pages 182-193, June.
    5. Jean-Pierre Benoit, 1985. "Innovation and Imitation in a Duopoly," Review of Economic Studies, Oxford University Press, vol. 52(1), pages 99-106.
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    More about this item


    Electronic Business; Adoption; Innovation; Network Effects;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • 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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