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Berger, Matthias; Matt, Christian; Hess, Thomas (2016): Connectivity Is Ubiquitous, but Is it Beneficial? A Numerical Approach to Assess Individuals' Valuations of Smart Home Systems. In: Proceedings of the 49th Annual Hawaii international Conference On System Sciences (Hicss 2016). IEEE Computer Society. pp. 5200-5209
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Abstract

Digitization of everyday products and individual compositions of complex systems foster technological home networks. Thereby, users decide which smart home systems (SHS) they wish to connect themselves. Despite this phenomenon's increasing relevance, previous research has not yet analyzed how individuals buy and combine systems for home network integration. Existing approaches do not consider the additional utility from connecting systems within home networks. Thus, we extend network effect theory with a user-centered view and formalize SHS valuation based on utility effects created by users' independent decisions to connect. Our model presents a comprehensive and outright way of system valuation and selection, and accounts for current connectivity benefits in home networks. Based on combinatory optimization, we derive optimal home network compositions and underline the influences of network size and density. These findings on decision behavior are critical for providers to assess the utility of their products and to tweak system configurations accordingly.