IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v21y1993i3p345-351.html
   My bibliography  Save this article

The declining-price paradox of new technologies

Author

Listed:
  • Eden, Y
  • Ronen, B

Abstract

The declining prices of new technology products often leads decision makers to postpone a capital investment and wait for lower prices. 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. In these cases, a declining-price 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 immediately. The paper presents a model incorporating learning considerations in investment decision making, and states the conditions where the paradox applies.

Suggested Citation

  • Eden, Y & Ronen, B, 1993. "The declining-price paradox of new technologies," Omega, Elsevier, vol. 21(3), pages 345-351, May.
    • Handle: RePEc:eee:jomega:v:21:y:1993:i:3:p:345-351
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/0305-0483(93)90091-X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gagnon, Roger J. & Sheu, Chwen, 2000. "The impact of learning, forgetting and capacity profiles on the acquisition of advanced technology," Omega, Elsevier, vol. 28(1), pages 51-76, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:21:y:1993:i:3:p:345-351. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.