IT Investment Under Competition: The Role of Implementation Failure
通过双寡头博弈模型，研究竞争如何影响企业投资IT的动机，发现IT实施失败的可能性会改变投资决策，高竞争市场中的企业更愿意投资高风险IT。
How does competition impact firms’ incentive to innovate by investing in information technology (IT)? Prior literature suggests opposite predictions on the direction in which competition drives IT investment. This paper analyzes a game theoretic model of duopoly competition and shows that an important feature of IT sheds new light on firms’ investment decisions: IT implementation can fail. Without the possibility of implementation failure, the opportunity to invest in IT hurts firms’ profits because the productivity gains are competed away. Implementation failure creates a possibility of cost-based differentiation and mitigates competition, although these two effects can drive firms’ IT investment in opposite directions. Interestingly, a higher probability of implementation failure can lead to lower investment risks and higher expected profits. Firms in highly competitive markets are better able to recoup the returns to their IT investments and, therefore, more motivated to invest in risky IT than firms in less competitive markets. The online appendix is available at https://doi.org/10.1287/mnsc.2017.3005 . This paper was accepted by Chris Forman, information systems.