The Efficiency of Decreasing Payment Amounts in Mobile Commerce and Ubiquitous Computing

Abstract

Personalised, location-related and differentiated services in the mobile digital economy create a demand for suitable pricing models. In the case of disaggregated "microservices" (e.g., small digitalized information or service units), as well as for the acquisition of low-value physical goods, the deployment of micropayments seems appropriate. This paper analyzes the economic efficiency of marginal transaction amounts in M-Commerce by applying the theoretical approach of transaction cost economics. For this purpose, a separation of technical and cognitive transaction costs is applied. The influence of selected determinants such as specifity, uncertainty and bounded rationality on transaction costs in mobile commerce micropayments is analyzed. The theoretical results imply a more likely application of micropayments for physical goods such as beverages or parking tickets than for digital goods and services. In addition, indicators for a significant above-zero lower limit of transaction amounts in mobile commerce are presented