Should We Wait? Network Externalities, Compatibility, and Electronic Billing Adoption

Abstract

Author biographies:YORIS A. AU is currently working on his doctorate degree in Information and Decision Sciences at the Carlson School of Management of the University of Minnesota. He obtained a B.S. in civil engineering from Parahyangan Catholic University, Bandung, Indonesia, and an M.B.A. from the Katz Graduate School of Business, University of Pittsburgh, Pennsylvania. Prior to joining the doctoral program at Minnesota, he worked in industry and consulting for eleven years at several major companies, including Digital Equipment Corporation as a software specialist, a coal-mining company in Indonesia as a superintendent of computer and network operations, Andersen Consulting as a senior consultant and manager, and an Internet startup as a general manager. His current research interests are in the areas of information technology adoption and e-commerce applications in the financial services industry. . The authors wish to thank the reviewers and participants of HICSS-34, especially Eric Clemons, Rajiv Dewan, Jeff Sampler and Yu-Ming Wang, for offering useful suggestions that shaped this work. We also thank the anonymous JMIS reviewers, who offered additional suggestions that enabled us to refine our claims about the contributions of this research. Finally, we are indebted to Michael Killen, Founder and Chairman of Killen & Associates of Palo Alto, CA, for sponsoring our ongoing research on electronic bill presentment and payment in financial e-commerce. All errors of fact or interpretation are the responsibility of the authors.

Technology Competition and Optimal Investment Timing: A Real Options Perspective

“…In general, strong network effects tend to result in very fast adoption of the technology that adopters believe will be most likely to win the standards competition. In some cases, however, network externalities will make people adopt a technology too early, even though waiting is Pareto-preferred (Choi and Thum, 1998;Au and Kauffman, 2001). A final point suggested by our model is that technology adopters actually require more assurance about the future technology standard outcome when they make technology investment decisions, although network effects usually speed up their decisions to adopt.…”

Diffusion of innovation: customer relationship management adoption in supply chain organizations

“…Numerous technologies are said to generate network effects, including computer networks for academic research [32], EDI [14], and open-standard interorganizational systems [1,61,78]. Choi et al [13] argued that the availability of software (e.g., open source) provided positive network externality effects.…”

An Assessment of NFC for Future Mobile Payment Systems

“…Studying two-sided markets, such as electronic payment systems [9], from a stakeholders perspective is appropriate to get a better comprehension of the diffusion process [13]. In support of this view, Au and Kauffman studied the stakeholders side (including consumers, merchants and providers) using network externalities theory to study electronic billing adoption [1,2]. In light of the many past mobile payment system failures, there is a real need to analyze and understand what requirements are needed to succeed on this market ruled by uncertainty.…”

“…As an illustration, in Austria, Paybox is estimated to be used by over 150'000 registered users and accepted by 4'000 merchants in March 2005 1 . One major difference of the mobile payment services initiated in Asia, Europe, and the U.S. markets is the technology deployed.…”