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

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... confronted with the decision of when to purchase microcomputer technology, conditions of declining costs. In their research, the authors found a paradox: under certain conditions total costs might actually increase by waiting to purchase to take advantage of declining hardware costs! As stated by Eden and Ronen: The greater the decline in the cost of a particular technology, the more urgent it may be to purchase the technology now. The paradox only holds under certain conditions, and these conditions appear to characterize the current personal computer industry. Conditions of the Paradox 1.) The first condition required by the paradox is a decline in the expected cost to invest in the technology in the future. Certainly, for personal computers, there has been a steady reduction in the cost of individual components like the CPU, memcry, diskette and disk drives, and so on. (There have been temporary increases in component prices due to government trade policies and shortages, for example, the recent shortage and increase in the cost of 32 bit DRAMS. However, over the long run, costs have been declining as power has increased.) 2.) The second factor which contributes to the paradox is postponed or foregone benefits from the technology. The user must incur a cost by waiting for new technology. He or she has to postpone a planned application. The cost of being the fourth rather than the first airline reservations system to install personal computers in travel agents'