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

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    The Future of Academic MIS Research: From Information Systems Economics to Innovative Business Models, Social Impacts, Public Policy, Regulation, and the Law
    ( 2018-01-03) Clemons, Eric K ; Wilson, Josh
    The academic research community is going to augment its research and teaching focus once again, comparable to the change in the 1980s when studying management of information was augmented with studying the impact of information on management. Just as information economics became newly significant for research and teaching in business school’s MBA programs, there will be an increasing focus on the impact of information on society and social welfare. The study of strategy will be augmented by the strategy of social policy, regulation, and the law. This will allow us to exploit our competitive advantage over researchers in large technology firms, which enjoy greater access to data, computing, and analytical staff. This will also make us more valuable to our students and to society.
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    On the Economies of Scale and Budget Allocations in Information Technology Services Provision
    ( 2018-01-03) Mithas, Sunil ; Han, Kunsoo ; Krishnan, M.S.
    This study reexamines some fundamental questions in the network era of computing using the data after 1995 when firms have made significant investments in newer types of IT systems. Our findings suggest that firms realize some economies of scale in IT services as they grow in size. We also find that the personnel-hardware ratio is not independent of IT budget. Finally, we find that personnel-hardware ratio was declining during 1999-2003 period in response to changes in factor prices of hardware and personnel. We discuss implications of these results for academic research and for managerial practice.
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    Corporate Knows Best (Maybe): The Impact of Global versus Local IT Capabilities on Business Unit Agility
    ( 2018-01-03) Queiroz, Magno ; Tallon, Paul ; Coltman, Tim ; Sharma, Rajeev
    The relationship between the corporate unit and its strategic business units (SBUs) has been variously described in the IS literature as either antagonistic or affable. At a time when corporate units are considering how to share platform-based capabilities (dubbed global IT) with SBUs, some SBUs may feel a loss of control while others see it as a chance to focus local IT on solving problems that are best handled by SBUs. Using data from an international survey of CIOs in the U.S., Germany, and Australia, we find that platform or global IT capabilities are associated with higher SBU agility notably when SBUs operate in a relatively stable environment. We also find that local IT influences SBU agility, particularly if SBUs have high levels of IT autonomy. Thus, the search for SBU agility may prompt corporate units to balance use of local and global IT resources and capabilities.
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    The Dynamics of Asset Sharing and Private Use
    ( 2018-01-03) Weber, Thomas
    The collaborative consumption of an asset, such as a car, an appliance, or a power tool, tends to degrade it faster than when it is kept for purely personal use. This paper examines the rational dynamic decision of when to share an asset and when to use it only privately. An optimal policy trades off additional degradation and resulting lifetime reduction against the additional revenue from sharing. Solving the underlying continuous-time optimal control problem, we characterize three possible regimes: personal consumption, full sharing, and partial sharing. Collaborative consumption may be optimal only at the beginning of the asset's lifetime; the optimal time to switch from sharing to pure private consumption is obtained in closed form.
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    Security Circumvention: To Educate or To Enforce?
    ( 2018-01-03) Dey, Debabrata ; Ghoshal, Abhijeet ; Lahiri, Atanu
    Deliberate circumvention of information systems security is a common behavioral pattern among users. It not only defeats the purpose of having the security controls in place, but can also go far beyond in terms of the total damage it can cause. An organization grappling with circumvention can try to (i) train its users, or (ii) take on enforcement measures, or adopt a combination of the two. In this work, we look at the trade-off between these two very different approaches towards circumvention and try to gain some insights about how an organization might wish to tackle this menace.
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    Pay-per-download or Freemium: Revenue Models in a Competitive Mobile App Market
    ( 2018-01-03) Luo, Xiaoxiao ; Zhang, Jie
    This paper examines the revenue model selection of app developers in a duopoly setting. Two developers offering vertically-differentiated apps can adopt either a pay-per-download or a freemium strategy. Under the pay-per-download strategy, consumers pay a fee to acquire the app. Under the freemium strategy, consumers are offered with a free basic version and can choose to pay an additional fee for the full version. A game theoretical model is used to analyze the competition in the presence of network effect and learning effect. We find that when the quality difference is moderate, the pay-per-download strategy is optimal for the high-quality app if the quality of basic version is low, otherwise freemium strategy is optimal. Responding to the pay-per-download strategy of the high-quality app, adopting the pay-per-download strategy is optimal for the low-quality app if quality of basic version is high, otherwise freemium strategy is adopted.
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    When Old Meets New: Wholesale and Agency Models in the Market for Printed and Electronic Books
    ( 2018-01-03) Kim, Antino
    In this work, I seek explanations to some of the curious phenomena reported in the book market by focusing on its two important characteristics: (i) the substitutability between the printed- and the e-book versions, and (ii) the mixture of the "old" wholesaling arrangement for printed-book versions and the "new" agency model for e-book versions. In this exploration, using a game theoretic model, I find that an increase in the agency fee that the retailer collects in the e-book market can depress the vitality of the market, which not only ends up hurting the publisher, but also the retailer. This raises a caution that retailers should be moderate in their efforts to get a bigger cut in the agency arrangement. I also find that some of the perplexing phenomena observed in the real world may be due to an excessively large agency fee in the e-book market, and that reducing this fee can lead to a win-win outcome for both the publisher and the retailer.
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    A Poisoned Chalice: Impact of Introducing a Store on Social Media Fan Pages on Customer Engagement and Product Sales
    ( 2018-01-03) Wang, Shuting Ada ; Wattal, Sunil
    While social media fan pages are being widely used by firms, their value in terms of influencing customer behavior is not clear. In this study, we examine the impact of introducing "stores" on social media fan pages on customer engagement and purchase. Using a unique dataset from a fashion retailer, we find that opening a fan page store can lead to negative outcomes for the firm. Our results suggest that introducing a fan page store significantly reduces customer engagement with the fan page by 26%. More importantly, results indicate that introducing a fan page store decreases the retailer’s sales by 4.6%. The study informs managerial practice on whether to leverage fan page stores for enhancing customer engagement and promoting sales.
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    Vanishing Borders in the Internet Age: The Income Elasticity of the Supply of Foreign Labor in Virtual versus Physical Markets
    ( 2018-01-03) Gong, Jing ; Hong, Yili ; Zentner, Alejandro
    This study investigates how the supply of foreign labor in virtual versus physical markets responds to monetary incentives using information on digital labor flows from a major global online labor platform for IT services in conjunction with data on physical labor flows into the United States. We use exogenous changes in the exchange rate as a source of identification: a depreciation of a country’s currency against the US dollar exogenously increases the incentives of its workers to seek employment in the United States. Our results suggest that monetary incentives, measured as a depreciation of a country’s currency against the US dollar, have a substantial impact on the supply of foreign labor in virtual markets. However, we do not find that monetary incentives have a statistically significant impact on the supply of foreign labor in physical markets, which might be expected since physical migration faces substantial bureaucratic restrictions and transaction costs.
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    Introduction to the Minitrack on Strategy, Information, Technology, Economics, and Society (SITES)
    ( 2018-01-03) Kauffman, Robert ; Weber, Thomas ; Clemons, Eric ; Dewan, Rajiv