OM ForumThe Best Things in Life Were Free: On the Technology of Transactions

  • Authors:
  • Paul Zipkin

  • Affiliations:
  • The Fuqua School of Business, Duke University, Durham, North Carolina 27708-0120

  • Venue:
  • Manufacturing & Service Operations Management
  • Year:
  • 2006

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Abstract

Radio-frequency identification (RFID) technology will reduce the costs of transactions to both customers and providers. This is a good thing, mostly. But it will be harder than people suppose, and it may have some adverse consequences. There are numerous technical and policy problems, including privacy and security issues. All these likely will be resolved, but only with time, experience, and money. Thus, it is unclear just how RFID will be used, just when various applications will become feasible. Also, as transaction costs decline, providers will be inclined to charge for things that are now free, such as public parks and congested roads. We may wait less at each transaction point, but such points may proliferate. Rather than obsess about this one technology, we should aim to think creatively about transactions and ways to improve them. Transactions affect our lives in many ways. A transaction is a process, not just an event. When people are involved, the process becomes intertwined with other intricate processes---product choice, social interaction, and the expression of power relations. RFID certainly offers the potential for improvement, but there are some lower-tech methods worth considering. This is not a systematic survey, but rather an essay, a sketch in broad strokes of an immense and varied landscape. Many topics are touched on lightly. The goal is to stimulate thought and discussion. More questions are raised than answered. In places the tone is personal, some might say eccentric.