Physical Sciences and Mathematics Commons^™

Technology Investment Decision-Making Under Uncertainty In Mobile Payment Systems, Robert J. Kauffman, Jun Liu, Dan Ma

Research Collection School Of Computing and Information Systems

Innovations in the mobile payments industry provide potentially profitable investment opportunities for banks. Nonetheless, significant uncertainties are associated with decision-making for this IT investment context, regarding future market conditions, technology standards, and consumer and merchant responses, especially their willingness to adopt. As a result, traditional capital budgeting approach and experienced intuition have not been effective. We develop a model to support a bank’s mobile payment systems adoption decision-making at the firm level when it faces endogenous technological risks and exogenous market conditions. This study applies theory and modeling from financial economics for decision-making under uncertainty to investments in m-payment systems …