Information Technology and Management

Information and telecommunications technologies have profoundly altered the distribution channels available for a wide range of goods and services. In this paper we analyze a particular class of products, information goods and develop a first framework for predicting which information goods are most likely to see their production, distribution, and consumption patterns altered by the net, which are likely to see shifts in power and profitability, and which are likely to remain unchanged for the foreseeable future. We focus on music and news as a selected couple of very different information goods industries that follow two very different trajectories. Our results suggest that the power structure in news distribution is unlikely to be transformed rapidly. In contrast, the power structure in music is transforming rapidly. Star acts no longer need their record labels to certify their music to their fans, and digital production and distribution have reduced or eliminated the value of other assets owned by the record companies. The framework we use to analyze these two industries can readily be applied to a range of others ... from the production of television soap opera series to the publication of academic journals in polymer chemistry.

Much of the existing work on network externalities has assumed that network effects are dependent on network size. Very little consideration has been given to the view that marginal benefits from joining the network may not increase with network size, if consumer benefits come from direct interactions with neighbors in a local network. We use agent-based simulation to examine the effectiveness of the traditional network market strategy in the presence of a local network. Our results show that it is appropriate to establishing a sustainable network by leveraging the properties of local networks.

Electronic auction markets collect large amounts of auction field data. This enables a structural estimation of the bid distributions and the possibility to derive optimal reservation prices. In this paper we propose a new approach to setting reservation prices. In contrast to traditional auction theory we use the buyer’s risk statement for getting a winning bid as a key criterion to set an optimal reservation price. The reservation price for a given probability can then be derived from the distribution function of the observed drop-out bids. In order to get an accurate model of this function, we propose a nonparametric technique based on kernel distribution function estimators and the use of order statistics. We improve our estimator by additional information, which can be observed about bidders and qualitative differences of goods in past auctions rounds (e.g. different delivery times). This makes the technique applicable to RFQs and multi-attribute auctions, with qualitatively differentiated offers.

We consider the problem of providing decision support to a patrolling or security service in an adversarial domain. The idea is to create patrols that can achieve a high level of coverage or reward while taking into account the presence of an adversary. We assume that the adversary can learn or observe the patrolling strategy and use this to its advantage. We follow two different approaches depending on what is known about the adversary. If there is no information about the adversary we use a Markov Decision Process (MDP) to represent patrols and identify randomized solutions that minimize the information available to the adversary. This lead to the development of algorithms CRLP and BRLP, for policy randomization of MDPs. Second, when there is partial information about the adversary we decide on efficient patrols by solving a Bayesian–Stackelberg games. Here, the leader decides first on a patrolling strategy and then an adversary, of possibly many adversary types, selects its best response for the given patrol. We provide two efficient MIP formulations named DOBSS and ASAP to solve this NP-hard problem. Our experimental results show the efficiency of these algorithms and illustrate how these techniques provide optimal and secure patrolling policies. We note that these models have been applied in practice, with DOBSS being at the heart of the ARMOR system that is currently deployed at the Los Angeles International airport (LAX) for randomizing checkpoints on the roadways entering the airport and canine patrol routes within the airport terminals.

Database management systems are the primary tools of automated record keeping, reporting, auditing, and control. Although they have significantly improved the efficiency and speed of record keeping, the ability to detect errors and maintain quality has not kept pace. There are three major strategies of error detection, auditing, and control to maintain integrity. The three strategies are introduced, and compared in terms of efficiency and effectiveness in eliminating errors. The optimum timing of audits under each strategy is computed. One strategy is shown to be completely dominated by the others. Hybrid strategies involving various combinations of the three pure strategies are introduced, and their performance computed. Hybrid strategies are shown to outperform the pure strategies under most realistic conditions. Finally, optimum audit strategies are devised, and their parameters computed.

Social media has become an online platform for businesses to market products/services and to manage customer relationships. While more and more small businesses have jumped on the bandwagon of social media in recent years, we found that only a limited number of published articles are currently available regarding the decision-making factors for social media adoption by small businesses. To understand why and how small businesses (i.e., small non-manufacturing enterprises) in the U.S. adopt social media, and for which business purposes, we conducted a case study using an approach that combined literature review, interviews, and cross-checking social media sites. In particular, we interviewed 27 small businesses as our cases in a mid-size U.S. city in terms of their social media adoption for business purposes. This study revealed some novel insights and developed a decision support model composed of factors critical to successful social media adoption by small businesses.

For educators, the World Wide Web offers a valuable technology for knowledge sharing. It can complement more traditional approaches to knowledge sharing such as books and lectures. Here, we identify and differentiate three major approaches for Web-based knowledge sharing: course-centered sites, subject-centered sites, and book-centered sites. A rationale for book-centered sites, those developed to facilitate students’ and instructors’ efforts in courses that use the book, is advanced. We introduce an architecture of features that can guide developers of such sites. This is illustrated by a book-centered site implemented according to the architecture. Several sites for introductory business computing books are compared and contrasted in terms of the architecture, suggesting ways in which each can be extended.

Component-based software development is a promising set of technologies designed to move software creation from its current, labor-intensive, craft-like approach to a more modern, reuse-centered style. However, a lesson learned from previous radical software process innovations is that a strong technology alone is generally insufficient for successful adoption. In order for gains to be realized from such technologies the management practices surrounding the implementation of the new technology must also change. It is with this view that we propose the adoption of a complementary management approach called activity based costing (ABC) to allow organizations to properly account for and recognize the gains from a component-based approach. ABC enables a management environment where appropriate incentives are created for the development and reuse of software components. Data from a large software vendor who has experience with ABC in a traditional software development environment are presented, along with a chart of accounts for a modern, component-based model.