| The dissertation examines the timing of purchases of durable information technology products in several contexts. Chapter 2 estimates a structural model of demand for the personal computer (PC). The model provides estimates of the differences in the marginal value for quality across demographic groups, consumer types, and an estimate of the difference in costs faced by upgraders and those who have not yet purchased a PC. These estimates allow for counterfactual evaluation of how demand would shift in response to a change in the rate of PC quality improvement, and allows for an assessment of the impact of policies designed to close the Digital Divide, such as subsidies for first-time buyers. The evidence suggests that the Digital Divide results from the interaction between learning costs, persistent consumer heterogeneity and dynamic technological change in the personal computer industry.; Chapter 3 analyzes the rapid diffusion of the Internet across the United States over the past decade for both households and firms. The analysis explains why dial-up connection has reached the saturation point while high speed connection is far from it. Specifically, we see a geographic digital divide for high speed access. We consider costs and benefits on the demand and supply side, and we also discuss several pictures of the Internet's current physical presence using some of the main techniques for Internet measurement to date. Through this analysis we draw general lessons about how other innovative aspects of the Internet diffuse.; Chapter 4 shows that, when consumers have an intertemporal choice and an intratemporal choice, shocks to future choices can cause outcomes that indicate time inconsistency. For a durable good with both a high quality and a low quality version, the shocks include: a pre-announced future price decrease for the high quality good, and preannounced future entry of a high quality version (when just the low quality version currently exists). If consumers are time inconsistent, when either shock occurs, demand for the lower quality good next period may be higher than it would have been absent the shock. Such a response will not occur if consumers discount exponentially. |
