Abstract

The paper considers the conditions governing the diffusion and development of e-commerce. The analysis builds on earlier discussions of technological successions and explores a number of factors, not normally considered, which are likely to have a bearing on the probability of e-commerce IS technologies displacing traditional IS technologies. The first factor is differentiation of the characteristic sets offered by the old and new technologies, and contrast this with higher performance specifications over the same set of characteristics. Second, we consider differential costs due to scale economies. Differential falling unit costs of alternative information systems (IS) affect demand when these are transmitted to prices, altering the pricequality combinations offered by old and new IS technology providers. Third, we consider time as a possible explanatory variable. Altering the time in which new IS technology providers are able to exploit their superior applications is likely to affect the probability of a technological succession occurring. Analysis is conducted via simulation techniques on an agent-based model that contain heterogeneous populations of adaptive users and providers who co-evolve over time.

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