The Declining Price of Personal Computers: The Question of When to Invest

Abstract

When should a manager invest in new technology? This paper provides guidelines for deciding when to invest in microcomputers. The authors argue that the technology and marketplace of micros today fits the conditions of the declining cost paradox observed by Eden and Ronen (1988). Under these conditions, a decision to defer purchasing equipment until the future to take advantage of hardware price decreases may lead to higher overall costs. The paper concludes with recommendations for the manager confronted with the decision of when to purchase microcomputer technology.