ELECTRONIC COMMUNICATION INNOVATIONS - OVERCOMING ADOPTION RESISTANCE

Customers often resist the adoption of electronic communication innova tions offered by suppliers because of customer adoption costs. In addi tion to tangible adoption costs, for example the purchase of new techn ology, there are intangible costs, often related to organizational ine rtia and behavioral resistance. We study electronic communication inno vations that aid transactions of a marketed good between suppliers and customers, and show hen; suppliers can encourage innovation adoption. This encouragement includes not only the price of the marketed good b ut also the design of the innovation and innovation support given to c ustomers. We argue that, first, innovation support given to customers by suppliers to facilitate adoption compensates for customers' adoptio n costs. Second, because customers tradeoff adoption benefits with the price of the marketed good, the impact of innovation design on adopti on benefits counterbalances changes in the price of the marketed good.