Strategy, Information, Technology, Economics, and Strategy (SITES)
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Item Care Quality, Technology Use, and Online Patient Perception(2019-01-08) Saifee, Danish; Bardhan, Indranil; Lahiri, Atanu; Zheng, ZhiqiangThe literature on the efficacy of online reviews suggests that such reviews are usually effective in informing consumers about the product or service. This mitigates information asymmetry, paving the way for an efficient marketplace. However, the literature is unclear about the usefulness of online reviews in the healthcare context. Since healthcare is largely a credence good, it is indeed possible that online reviews are not as informative in its case as they are in some others. In this work, we take a closer look at what online physician reviews actually capture, by studying the association between online reputation of a physician and her adherence to clinical guidelines. We also study the association between reputation and electronic health record (EHR) usage. Our results reveal that online reputation does not adequately reflect care quality, in the sense that improved adherence to care guidelines does not seem to be associated with better online reviews. However, EHR usage seems to have a somewhat positive association, suggesting that reviews can capture efficiency improvements from information technology even when they do not capture care quality.Item Platforms in the Sharing Economy: Does Business Strategy Determine Platform Structure?(2019-01-08) Clemons, Eric; Constantiou, Ioanna; Marton, Attila; Tuunainen, VirpiSharing economy businesses are increasingly important, but the relationships between their strategies and their platforms’ structure has received insufficient attention. To address this gap, we develop testable hypotheses building on following expectations. 1) Sharing economy businesses are attacking mature markets; 2) most sharing economy businesses follow one of Porter’s two basic strategies, seeking a price advantage or a differentiation advantage; and 3) platforms that support differentiation-based strategies must provide more information to their users than platforms that support cost-based strategies. We located a database of 100 investment-grade sharing economy businesses to test our hypotheses. Our hypotheses received strong support from this database.Item Network Effects, Consumer Expectations and Ride-hailing Rivalries: Understanding How Platform Entries Influence New Car Sales(2019-01-08) Guo, Yue; Li, Xiaotong; Zeng, XiaohuaThe gradual entries of ride-hailing platforms across China provide us with a unique opportunity to examine the interplay among network effects, consumer expectations and platform competition in the sharing economy. While recent empirical evidence shows that the initial entry of Didi Chuxing (the leading ride-hailing platform in China) positively impacts new car sales in the short run, our study demonstrates that, once the time window of investigation is expanded from one year to three years, the impacts of entries on new car sales turn negative. In addition, our analysis provides evidence suggesting that intensified competition resulting from platform rivalries can boost new car sales to alleviate the negative impacts in the short run.Item Competition and Coopetition among Social Media Content(2019-01-08) Yoo, Eunae; Gu, Bin; Rabinovich, ElliotSocial media platforms are characterized by an immense volume of content that exists concurrently. In this study, we analyze competition and coopetition among social media content. Under a competitive dynamic, the diffusion of one piece of content deters the diffusion of another. Alternatively, a coopetition dynamic means that the spread of a social media post augments the diffusion of another. The purpose of our study is to investigate whether competition or coopetition emerges among social media content and identify determinants of the direction of the interaction. To that end, we formulated a generalized self-exciting point process model and evaluated the model using Twitter data. We generally find that a competitive relationship exists among content, but, interestingly, some content experienced a cooperative interplay. In particular, we observe an asymmetry between large and small content producers in that coopetition favors content published by large producers.Item Social Networks in Online Peer-to-Peer Lending: The Case of Event-Type Ties as Pipes and Prisms(2019-01-08) Wang, Bin; Escobari, Diego; Wang, XiaopengA considerable amount of academic research on crowdfunding has highlighted the importance of online social networks to crowdfunding success. Despite findings from these early studies, the focus of the extant literature has been on more persistent state-type ties such as friendship. In the current research, we examine how borrower-partner and borrower-team event-type ties affect lender behavior and loan success in online peer-to-peer (P2P) lending. Our empirical results using a multilevel mixed effects model reveal that borrower-team networks function as pipes that facilitate the flow of information and prospective lenders while borrower-partner ties function as prisms that signal borrowers’ pressing financial need. Our results highlight the importance of establishing lending teams on crowdfunding platforms to enhance lender contribution.Item Open Voice or Private Message? The Hidden Tug-of-War on Social Media Customer Service(2019-01-08) He, Shu; Lee, Shun-Yang; Rui, HuaxiaWe study customers’ and brands’ preferences towards public and private customer service interactions on social media. Using a natural experiment where the ease of private communication with a brand is exogenously and significantly increased, we found that complaining customers prefer to do so publicly while some non-complaining customers prefer to communicate privately. However, through a randomized field experiment, we found that firms prioritize complaints received from the private channel over complaints received from the public channel. Therefore, brands, well aware of the risk of subjecting its customer service under public scrutiny, prefer complaints communicated privately and seem to nudge customers towards switching back to the traditional mode of customer service where all interactions are private. The divergent preferences towards open voice and private message suggest a hidden tug of war between the traditional delivery of customer service featuring brand control and social media customer service featuring transparency and openness.Item Dynamic Learning in Markets: Pricing, Advertising, and Information Acquisition(2019-01-08) Weber, ThomasIn the face of demand uncertainty, a monopolist can observe sales as a controlled reaction to its price and advertising so as to improve the choice of this marketing mix in the future. Furthermore, to upgrade its knowledge about demand the firm has the option to invest in external market intelligence and thus to directly acquire relevant information. Using a two-period model we determine the firm's profit-maximizing learning strategy using all three of these levers: price, advertising, and information acquisition. This illustrates the firm's tradeoff of actively managing its consumer base through costly marketing, exploiting expected demand through pricing, and increasing the efficiency of its actions by means of costly outside information. An extension of the model to the case with internal budget constraints on information acquisition is provided, and a numerical example is discussed.Item Information Technology and the Cost of Bank Loans: An Empirical Investigation(2019-01-08) Han, Shu; Hasan, Shameem; Tucci, ChristopherIn this paper, we examine the effect of IT investment on the cost of bank loans for firms, drawing upon theories of banking and risk management. On one hand, IT may be able to reduce the risk of being overtaken by competition or other adverse situations; on the other hand, the IT investment itself might be considered risky due to nature of the digital transformation. Using a sample of 261 firms from 1991-2006 and data from InformationWeek, DealScan and Compustat, we find that IT investment is associated with lower interest rates from banks. More importantly, we find the strength of this relationship is contingent upon the role of IT in the industry, the intensity of competition in the industry, and whether the firm is diversified.Item Renegotiation of Software Outsourcing Contracts(2019-01-08) Huang, He; Hu, Minhui; Kauffman, Robert; Xu, HongyanFixed-price and time-and-materials contracts are commonly-used contract forms by clients in software outsourcing. The two parties, client and provider, usually renegotiate the testing time after system development occurs. This research investigates the impacts of such renegotiation on the client’s contract choice. Our analysis shows that under both contract forms, renegotiation can incentivize the provider’s effort, and this effect becomes more influential when the provider has higher bargaining power. Compared with a fixed-price contract, a time-and-materials contract can stimulate the provider’s effort based on the terms for monitoring and reimbursement. The results suggest that when the provider has high bargaining power, the client will prefer a fixed-price contract. But when the provider has low bargaining power and the cost of monitoring is low, the client will prefer a time-and-materials contract. When the provider has low bargaining power and the cost of monitoring is high though, the client will prefer a fixed-price contract.Item Do You Really Know If It’s True? How Asking Users to Rate Stories Affects Belief in Fake News on Social Media(2019-01-08) Moravec, Patricia; Kim, Antino; Dennis, Alan; Minas, RandallThe rise of “fake news” has become a major concern for social media platforms. In response, Facebook has proposed and tested the idea of users flagging and rating news articles and sources, much akin to how consumers rate products and services on the Internet. One obvious challenge with this crowdsourced rating approach is whether the users really know enough to rate news articles and sources. Perhaps, a side benefit of asking users to evaluate an article—and asking about their personal experience with the event described in the article—is making them realize that they do not know enough about the event to make an accurate judgment, thus pushing them to become more skeptical. We asked 68 social media users to assess the believability of 42 social media headlines. We found that, while users were generally more likely to believe articles that agreed with their point of view, asking users to rate pushed them to think more critically about the truthfulness of the articles. Moreover, once users had been asked to rate some articles, they remained critical of other articles as well, even without the rating prompt. Overall, our findings suggest that asking users to evaluate the truthfulness of articles may not only produce rating information that can be a useful reference at a later point in time but also have an immediate benefit of alerting users to think more critically about all articles they see.