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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/14488
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| Title: | THE DECLINING PRICE PARADOX OF NEW TECHNOLOGIES |
| Authors: | Eden, Yoram
Ronen, Boaz |
| Issue Date: | May-1987 |
| Publisher: | Stern School of Business, New York University |
| Series/Report no.: | IS-87-35 |
| Abstract: | The declining prices of new technology products often results in a
tendency for many decision makers to wait for lower prices, and to
postpone a capital investment. This paper makes a distinction between
the prices of technology elements and the prices of components and
systems. There are many cases where the price reduction over time
applies only to some elements of the system, while the total price of
the improved system remains almost the same. For those cases, a
DECLINING PRICE PARADOX is spelled out. The Paradox suggests that the
more the price of the investment is subject to future reduction, the
more urgent it is to invest in this technology. The paper incorporates
learning considerations in the investment decision making, and states
the conditions where the paradox applies. |
| URI: | http://hdl.handle.net/2451/14488 |
| Appears in Collections: | IOMS: Information Systems Working Papers
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