This dissertation studies business impacts of information technology on firms and vendors. Specifically, it looks at the timing, pricing, and system design issues involved in managing technology. It consists of three studies. Study one looks at the timing issue by investigating the growth of performance per cost of computing technologies, and discusses how this impact business. Study two tackles the pricing and system design issues of the implementation of a new electronic payment system. Study three looks at how technical design can facilitate the market acceptance of an electronic payment system vendor....[ Read more ]

This dissertation studies business impacts of information technology on firms and vendors. Specifically, it looks at the timing, pricing, and system design issues involved in managing technology. It consists of three studies. Study one looks at the timing issue by investigating the growth of performance per cost of computing technologies, and discusses how this impact business. Study two tackles the pricing and system design issues of the implementation of a new electronic payment system. Study three looks at how technical design can facilitate the market acceptance of an electronic payment system vendor.

Study one investigates the growth of technology performance per cost over time that has been variously described to as the 'technological trajectory'; 'technology acceleration'; and 'impetus to innovate'. This study is related to the broader economic study of what are called hedonic pricing methods, which themselves are approaches to identifying shadow values. The hedonic pricing literature attempts to infer demand for product characteristics (such as performance) from market prices. This research reviews the hedonic pricing literature for computers, extends the existing literature for a broad range of computers and peripherals, and proposes technology-specific dynamic measures of price-performance change that is robust.

Study two deals with the implementation problem of electronic micro-payment service providers. Very few micro-payment systems have been successful to date. The mixed outcomes of different micro-payment systems may be attributed to the very basic market structure. A micro-payment market can be conceptualized as a two-sided market involving users and merchants subject to positive externality effect on both sides. The underlying dynamics of these two-sided markets are not very well understood. By developing an analytical model, we propose to investigate the implications of such a two-sided market structure by looking at factors affecting the existence of a market for micro-payment systems, how the users and merchants choose their acceptance levels, and how the profit maximizing system provider sets the prices.

Study three looks at the market acceptance problem of payment service providers, and related design issues of payment initiatives at the consumer learning stage, using a psychological perspective. It contributes by investigating knowledge transfer between existing and new payment technology when the two are technically linked together. Three aspects of knowledge about payment technology are investigated: payment timing, card usage area, and associated memory recall of transactions.