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

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    The Need to Revise Copyright Law to Reflect the Changing Costs and Benefits of Modern Digital Reuse of Artistic Creations
    ( 2022-01-04) Clemons, Eric ; Schreieck, Maximilian ; Teilmann-Lock, Stina
    Copyright law has always sought to maximize the quantity of valuable creative works available to society. While protecting the creative artists is essential, it is in some sense incidental; the reason to protect the artist is that them, there would be nothing to copy. As new digital technologies for transforming artistic works gain in capability, the ease of producing innovative and valuable works based on the reuse of prior work increases, meaning that society can now benefit from an increased supply of works based on the reuse of others. This suggests that restrictions on reuse that were considered optimal in the past should now be relaxed. We suggest changes to copyright law to achieve this new optimum. We suggest that artistic merit should once again be considered relevant to copyright law, in this case to determine when artistic works should be permitted to reuse works still subject to copyright protection. We retain the concept of originality in deciding when works based on reuse should themselves be granted copyright.
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    The Effect of Artificial Intelligence (AI) on Firm Labor Structure
    ( 2022-01-04) Xue, Mei ; Cao, Xing ; Feng, Xu ; Gu, Bin ; Zhang, Yongjie
    This paper aims to study the effect of AI on firm labor structure. Using a unique panel data of over 1300 publicly listed companies in China from 2007 to 2018, we study the effect of AI on firms’ labor composition measured by labor force’s education levels. We further compare the effect of AI on firms in the manufacturing sector to the effect on firms in the service sector. Our analysis generates two major findings. First, the use of AI leads to a larger labor demand increase for jobs requiring lower education levels than those requiring higher education levels. Second, the effect is stronger in the service sector than in the manufacturing sector. These findings contradict predictions of the “skill-biased technological change” (SJTB) and U-shaped “job polarization” effects proposed in the prior literature. We propose that “technology-enabled deskilling” effect is driving the effect of AI on labor structure.
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    Strategic Interdependent Security Systems
    ( 2022-01-04) Weber, Thomas
    We develop a model of investments in interdependent security systems in the presence of a strategizing opponent, who attempts to infiltrate at least one of the systems with a harmful device. In the first stage, a finite number of targets decide about their respective investments in direct and indirect security systems by choosing appropriate detection probabilities minimizing expected losses. In the second stage, infiltration of a target's security system with the harmful device is directed by the agent from the outside and may occur either directly by a target's failing to detect the device at its entry level or indirectly by first passing undetected through the other target's entry screening and subsequently clearing the cross-screening device.
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    Partnering for Value Perfection and Business Sustainability in the Cloud Services Brokerage Market
    ( 2022-01-04) Shang, Richard ; Kauffman, Robert
    The cloud computing and services market has advanced in the past ten years. They now include most IT services from fundamental computing to cutting-edge AI capabilities. With the widespread adoption of cloud services, clients are facing the fact that they are utilizing cloud resources at a sub-optimal level. Cloud services brokers (CSBs) grew from the market to fill the needs for cloud resource management and risk mitigation. Based on analysis of the cloud market and the case of cloud services brokerage and related activities in North America, we offer theoretical analysis for how value creation works, its impacts on the cloud ecosystem, and factors that support the value and sustainability of the CSB intermediation process.
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    Dear Guests, Please Pay for my License – Analyzing the Heterogenous Cost-Pass-Through of Commercial and Non-Commercial Rental Suppliers in Response to Regulatory Policies
    ( 2022-01-04) Müller, Michelle ; Neumann, Jürgen ; Kundisch, Dennis
    Peer-to-peer rental markets have been shown to adversely impact the traditional hospitality industry and housing affordability, fueling the demand for regulation. While localities have implemented policies to address these issues, little is known about how rental suppliers respond to those regulations. Analyzing a policy implemented in New Orleans, which introduced annual bring-to-market costs while simultaneously banning listings from one city-center neighborhood, we reveal that hosts increase their prices as a result of the policy. We show that non-commercial hosts completely pass their additional costs onto their consumers. By contrast, commercial hosts with legalized listings located in the city center only partially pass on their costs to their guests, while decreasing prices in the rest of the city. Our results indicate that the policy falls short of reducing pressure on housing affordability in the city center, as peer-to-peer renting remains attractive when bring-to-market costs can easily be passed through to consumers.
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    Bundling of Digital Goods in the Presence of Piracy
    ( 2022-01-04) Wu, Chenguang (Allen) ; Jin, Chen ; Lahiri, Atanu
    The efficacy of bundling is well-known in the context of digital goods with zero marginal cost. However, digital goods are also prone to piracy, and it is not clear what impact piracy might have on the efficacy of bundling. Prior research on this issue is limited, and it suggests that the appeal of bundling remains intact in the face of piracy. Using a model that recasts the classic bundling problem in the backdrop of piracy, we question this insight and show that piracy can severely diminish the appeal of bundling. In fact, bundling exacerbates the piracy problem and pushes more consumers to substitute the legal products with illegal ones, which more than offsets the usual benefits of bundling to a monopolist seller. Overall, the manufacturers of digital goods need to take piracy into consideration in their bundling decision and, perhaps, refrain from bundling when they anticipate the threat of piracy to be severe.
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