Collaborative technology improvements and other advances in IT are expected to reduce costs, and increase output. This should result in an increase in productivity - the ratio of output to input. However, empirically, this has been hard to establish. The next paper by Thatcher and Oliver sheds new light on this matter. They use an analytical model to show that the paradox may be created by mis-measurement of productivity.
Many researchers use revenue as a proxy for output in productivity measurement.
The authors identify this mis-measurement as a source of the paradox. Continuing in the examination of decision making in the firm, Clemons and Aron look at the decision to allocate budget for product development and advertising. In this innovative work, the authors unite two hitherto disparate streams of literature. Investments in product design have been much studied in engineering management while marketing researchers have examined the value and cost of advertising. On the margin, a manager has to pick between these two competing activities and to-date there has been no comprehensive model to address these issues.