Title

Technology Investment Decision-Making under Uncertainty: The Case of Mobile Payment Systems

Publication Type

Conference Proceeding Article

Publication Date

1-2013

Abstract

The recent launch of Google Wallet has brought the issue of technology solutions in mobile payments (m-payments) to the forefront. In deciding whether and when to adopt m-payments, senior managers in banks are concerned about uncertainties regarding future market conditions, technology standards, and consumer and merchant responses, especially their willingness to adopt. This study applies economic theory and modeling for decision-making under uncertainty to bank investments in m-payment systems technology. We assess the projected benefits and costs of investment as a continuous-time stochastic process to determine optimal investment timing. We find that the value of waiting to adopt jumps when the related business environment experiences relevant shocks. Also, when the rate of benefit flows, the time horizon for decision-making, and the time value of money change, the recommended investment timing and optimal investment value will change too. We also consider how network effects influence decision-making for this IT investment context.

Discipline

Computer Sciences | Management Information Systems | Technology and Innovation

Research Areas

Information Systems and Management

Publication

Proceedings of the 46th Annual Hawaii International Conference on System Sciences

First Page

4166

Last Page

4175

ISBN

9780769548920

Identifier

10.1109/HICSS.2013.624

Publisher

IEEE Computer Society

City or Country

Los Alamitos, CA

Additional URL

http://dx.doi.org/10.1109/HICSS.2013.624