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|Title: ||THE DECLINING PRICE PARADOX OF NEW TECHNOLOGIES|
|Authors: ||Eden, Yoram|
|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
|Appears in Collections:||IOMS: Information Systems Working Papers|
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