Buying High Tech Products

Abstract

Prior research on technology-intensive (TI) markets makes abstraction of the social context in which transactions take place. In contrast with this prior literature, the authors show that buyer-vendor transactions in TI markets are relationally and structurally embedded in an interfirm network. Their main premise is that buyers in TI markets prefer vendors with whom they can share a strong tie, and that in turn buyers want these vendors to share strong ties with their component manufacturers. This is an important addition to TI literature and to the on-going debate on the strength of ties in the sociology, management and marketing literatures. The authors also specifically consider how characteristics focal to TI markets, such as the know-how buyers possess or the pace of technological change they perceive, affect the extent to which buying behavior is relationally and structurally embedded. An empirical test in the computer network market shows good support for the developed theory.

Keywords: technology-intensive markets, embeddedness, buying behavior, tie strength, conjoint analysis

JEL Classification: M, M31, C44