The Diffusion of Disruptive Technology: The Role of Business Application vs. Technology Learning for Consumer Mobile Payment Adoption

38 Pages Posted: 24 Jul 2018 Last revised: 24 Feb 2024

See all articles by Shaohui Wu

Shaohui Wu

Harbin Institute of Technology

Yong Tan

University of Washington - Michael G. Foster School of Business

Yubo Chen

Tsinghua University, School of Economics & Management

Yitian (Sky) Liang

Tsinghua University - School of Economics and Management

Date Written: February 22, 2024

Abstract

Disruptive technologies bring radical changes to businesses and societies. Yet, their diffusion and assimilation rarely unfold in a smooth and linear fashion. In this paper, taking mobile payment as a prominent example, we study the distinct roles of business application context (i.e., mobile shopping) and technology itself (i.e., online payment) in its diffusion. Leveraging a rich dataset from a leading e-commerce company, we propose a Bayesian learning structural model to characterize how users resolve the uncertainties surrounding the benefits of these two critical components of mobile payment. Our results reveal that users indeed engage in both learning processes. While learning mobile shopping could be more promotion-focused on its benefits, learning online payment could be more prevention-focused on its risks. Consequently, people resolve uncertainties on mobile shopping much faster than online payment. In addition, inertia plays an important role, i.e., users with high (vs. low) membership are less likely to migrate from shopping on PC to mobile, and from offline to online payment. Finally, counterfactual simulations show that companies can promote mobile payment more efficiently with a combination of high frequency and low financial amounts. Although technology itself is the foundation, our results shed light on the importance of business context in the diffusion of mobile payment, a typical example of disruptive technologies. We also discuss relevant managerial implications.

Keywords: Disruptive technology, FinTech, mobile payment, mobile shopping, Bayesian learning

JEL Classification: M15, M31, L86

Suggested Citation

Wu, Shaohui and Tan, Yong and Chen, Yubo and Liang, Yitian (Sky), The Diffusion of Disruptive Technology: The Role of Business Application vs. Technology Learning for Consumer Mobile Payment Adoption (February 22, 2024). Available at SSRN: https://ssrn.com/abstract=3206561 or http://dx.doi.org/10.2139/ssrn.3206561

Shaohui Wu

Harbin Institute of Technology ( email )

92 West Dazhi Street
Nan Gang District
Harbin, heilongjiang 150001
China

Yong Tan

University of Washington - Michael G. Foster School of Business ( email )

Box 353226
Seattle, WA 98195-3226
United States

Yubo Chen (Contact Author)

Tsinghua University, School of Economics & Management ( email )

Beijing, 100084
China

Yitian (Sky) Liang

Tsinghua University - School of Economics and Management ( email )

Wei Lun Building 543
Tsinghua University
Beijing, 100084
China

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