Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73725
Authors: 
Sülzle, Kai
Year of Publication: 
2006
Series/Report no.: 
Ifo Working Paper 38
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.
Subjects: 
Electronic business
adoption
innovation
network effects
JEL: 
L10
O31
Document Type: 
Working Paper

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