Society, Information, Technology, Economics and Strategy (SITES)

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Now showing 1 - 9 of 9
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    Information Disclosure and Security Vulnerability Awareness: A Large-Scale Randomized Field Experiment in Pan-Asia
    ( 2020-01-07) Zhuang, Yunhui ; Choi, Yunsik ; He, Shu ; Leung, Alvin Chung-Man ; Lee, Gene Moo ; Whinston, Andrew
    This paper investigates how the disclosure of a security vulnerability index based on outgoing spams and phishing website hosting which may serve as an indicator of a firm’s inadequate security controls affects companies’ security protection strategy. Our core objective is to study whether firms improve their security when they become aware of their vulnerabilities and such information is publicized. To achieve this goal, we conduct a randomized field experiment on 1,262 firms in six Pan-Asian countries and regions. Among 631 treatment firms, we alert them of their security vulnerability index and ranking over time, and their relative performance compared to their peers via emails and a public advisory website. Compared with control firms without being informed of their security vulnerability index, treatment firms improve their security over time, with a significant reduction of outgoing spam volume. A marginally significant improvement in reducing phishing hosting websites is also observed among non-web hosting treatment firms. The security improvement may be attributed to firms’ proactive reaction to the public security vulnerability information. Our study provides cybersecurity policy makers with useful insights to motivate firms to adopt better security measures.
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    IT Risk Factor Disclosure and Stock Price Crashes
    ( 2020-01-07) Song, Victor ; Cavusoglu, Hasan ; Lee, Gene Moo ; Ma, Li Zhi
    As firms are increasingly more dependent on Information Technology (IT) for their business strategies and value creation activities, risks associated with IT become one of the top concerns for corporate boards and managers. This study examines the impact of IT-related risk factor disclosure in Item 1A of the 10-K annual report on stock price crashes. We use Latent Dirichlet Allocation topic modeling to identify risk categories in risk disclosures between 2006 and 2017. IT risk emerged as one of the key risk categories. We find that IT risk disclosure is positively correlated with a firm’s future stock price crash risk. We further separate IT risk factor disclosures into two categories: IT value risk that relates to a firm’s use of and reliance on information technology for its operations to reach its goals and objectives, and cybersecurity risk that could lead to a loss or leak of data. We find that while the correlation between cyber security risk disclosure and a firm’s future crash risk is significant, IT value risk disclosures do not have a significant correlation.
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    Nonlinear Pricing of Shareable Products
    ( 2020-01-07) Weber, Thomas
    We consider a durable-goods monopolist who is able to control the collaborative consumption of its goods on an aftermarket by a sharing tariff. Consumers are heterogeneous with respect to their respective need propensities in each period. We show that the firm may be able to extract this private information by offering a nonlinear pricing scheme, which amounts to a menu of options that distinguish themselves by different combinations of retail price and sharing tariff, whereby the latter is charged to owners at the point of sharing their item with a nonowner on the sharing market. The solution, which is obtained using optimal control theory, critically depends on the product's durability.
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    Effects of Flexibility, Security, and Information Features on Supplier Participation in the Sharing Economy: An Empirical Study
    ( 2020-01-07) Hong, Soo Jeong (Chris) ; Bauer, Johannes ; Lee, Kwangjin ; Granados, Nelson
    Firms in the sharing economy typically offer higher flexibility but lower security of working conditions. In response to challenges from suppliers and policy makers, several platform companies are reconsidering their approach. This study examines the effects of offering sharing economy suppliers a menu of contract options, differentiated by varying levels of flexibility, security, and information transparency on their willingness to work for a platform. We focus on ridesharing, one of the largest sectors in the sharing economy, but the insights translate to other segments of this emerging sector. Using a discrete choice experiment, we find drivers’ willingness to work for ridesharing generally increases when the platform offers diversified combinations of flexibility, security, and transparency. We also find evidence that suppliers’ preferences to participate in the sharing economy are influenced by the working conditions in their alternative employment options.
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    Close Encounters between AMC and MoviePass
    ( 2020-01-07) Dey, Debabrata ; Lahiri, Atanu ; Mukherjee, Rajiv
    Two threads regarding the recent feud between AMC Theaters and MoviePass have been quite popular in the news cycle: (i) the impending bankruptcy of MoviePass and (ii) the Twitter war between the two players. In this paper, we seek to evaluate if such developments are mere aberrations or if there is any economic rationale behind them. We develop a parsimonious microeconomic model for this purpose that sheds light on the competition/cooperation responses of a theater chain towards the entry of a non-essential intermediary. Our results have important implications for management and policy.
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    Run for the Group: The Impacts of Offline Teambuilding, Social Comparison and Competitive Climate on Group Physical Activity - Evidence from Mobile Fitness Apps
    ( 2020-01-07) Zhang, Yuan ; Zhang, Jie ; Liu, Zilong ; Song, Xiaolong
    To encourage users to exercise more and to improve the retention, mobile fitness app developers build apps with more social interaction features on the collective level, such as allowing users to join groups to work out and holding offline group meetup events. However, literature has not provided a clear theory on the impacts of the within-group social comparison and between-group competitive climate on the participation in group exercises. Motivated by this gap, we build a conceptual framework to explain the empirical effects based on the Social Comparison theory. Based on the Teamwork theory, we also propose that offline group team building activities moderate the above relationships. We collect usage data from a mobile fitness app and conduct a series of comprehensive empirical analyses to test and validate the main and moderating effects. Our results show that both the within-group social comparison and the between- group competitive climate can improve group exercise participation. Additionally, the amount of offline activities moderates the main effects in opposite directions. Our findings help fitness app developers to better understand the impacts of offline team building activities on the participation of the online virtual groups, and further, we provide implications regarding how to make online community policies and design gamification incentive mechanism to stimulate and promote offline team building activities.
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    Attention or Appreciation? The Impact of Feedback on Online Volunteering
    ( 2020-01-07) Tan, Jane ; Jin, Fujie ; Dennis, Alan
    We examine how different types of feedback influence online volunteer contributions in the context of online consultations for college entrance applications, which requires the volunteer counselor and the person receiving help (the counselee) to be online at the same time. We investigate the impact of two types of feedback on volunteers’ participation: 1) appreciation, as reflected in the number of positive ratings received by a counselor from counselees; and 2) attention, as reflected in the readership of a counselor’s profile page. We find that appreciation encourages the volunteer to engage in more helping behavior, likely because it can activate the volunteer’s altruistic motivation. In contrast, attention discourages volunteers to offer more help, possibly because they feel they have accomplished enough or because they feel passed over when they receive a lot of attention but few requests for consultations. The findings suggest that platform designers should encourage appreciation from those helped and provide more nuanced feedback about attention.
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    Product-driven Entrepreneurs and Online Crowdfunding
    ( 2020-01-07) Hu, Lin ; Wu, Zhenhua ; Gu, Bin
    Advancements in information technology is known for enabling new business models and new market mechanisms. Online crowdfunding is one such new mechanism through which entrepreneurs can advertise their potential products and attract investors from the mass. In this study, we advance the existing theory on online crowdfunding markets by recognizing that online crowdfunding provides not only a venue of fundraising to entrepreneurs but also a venue for them to obtain demand information before production and to signal their intention. We formulate a spatial competition model between profit-driven entrepreneurs and product-driven entrepreneurs and find that on average profit-driven entrepreneurs earn higher profits, but their advantage is constrained by the mechanism of the crowdfunding campaign, and product-driven entrepreneurs earn a significant fraction of the market. Comparing to the Keep-it-all funding scheme we used in the baseline model, the All-or-nothing scheme is more favorable for product-driven entrepreneur, under which the two type entrepreneurs earn equal market shares. We further discuss model implications for consumer satisfaction of the platform and find that including more product-driven entrepreneurs, or adopting All-or-nothing funding scheme improves the overall quality of the platform, but the effects on design popularity and consumer welfare are subtle.
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