MIS Distinguished Speaker Series

Temple University

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Archives for 2010

April 16: Chris Dellarocas to speak on Double Marginalization in Performance-Based Advertising: Implications and Solutions

By

Chris Dellarocas

Associate Professor,

Boston University

April 16, 2010

Alter Hall 405, 1000am – 1130am


Abstract

An important current trend in advertising is the replacement of traditional pay-per-exposure (pay-per-impression) pricing models with performance-based mechanisms in which advertisers pay only for measurable actions by consumers. Such pay-per-action (PPA) mechanisms are becoming the predominant method of selling advertising on the Internet. Well-known examples include pay-per-click, pay-per-call and pay-per-sale. This work highlights an important, and hitherto unrecognized, side-effect of PPA advertising. I find that, if the prices of advertised goods are endogenously determined by advertisers to maximize profits net of advertising expenses, PPA mechanisms induce firms to distort the prices of their goods (usually upwards) relative to prices that would maximize profits in settings where advertising is sold under pay-per-exposure methods. Upward price distortions reduce both consumer surplus and the joint publisher-advertiser profit, leading to a net reduction in social welfare. They persist in current auction-based PPA mechanisms, such as the ones used by Google and Yahoo. In the latter settings they always reduce publisher revenues relative to pay-per-exposure methods. In extreme cases they also lead to rat-race situations where, in their effort to outbid one another, advertisers raise the prices of their products to the point where demand for them drops to zero. I show that these phenomena constitute a form of double marginalization and discuss a number of enhancements to today’s PPA mechanisms that restore equilibrium pricing of advertised goods to efficient levels.

For a copy of the paper, click here.

April 2: Anindya Ghose to speak on Estimating Demand in the Hotel Industry by Mining User-Generated and Crowdsourced Content

By

Anindya Ghose

Assistant Professor,

Stern School of Business, NYU

April 2, 2010

Alter Hall 746, 1000am – 1130am

Abstract

User-Generated Content (UGC) is changing the way consumers shop for goods. It is increasingly being recognized that the textual content of product reviews is an important determinant of consumers’ choices, over and above any numeric information. Similarly, websites that facilitate the creation of social tags by users can influence the desirability of a product or service. Moreover, one can harness the collective wisdom of the crowds by eliciting consumer opinions through on-demand user-contributed surveys. Based on a unique dataset of hotel reservations over a 3-month period from Travelocity.com, we estimate the demand for hotels using a structural model that incorporates information from different kinds of UGC. Data on UGC is obtained from three sources: (i) text of hotel reviews from two well-known travel search engines, Travelocity.com and Tripadvisor.com, (ii) social geo-tags identifying the different location-based attributes of hotels from Geonames.org, and (iii) on-demand user-contributed opinions on the most important hotel characteristics from Amazon Mechanical Turk. These data sources are merged with satellite images of the different hotel locations to create one comprehensive dataset summarizing the location and service characteristics of the hotels in our sample. We use text-mining techniques to incorporate textual information from user reviews in our estimation. We supplement these methods with image classification techniques and on-demand user-generated annotations. We estimate a two-step random coefficient structural model to infer the weight that consumers place on different location and service-related features of hotels. We also quantify how the extent of subjectivity, readability, complexity and other stylistic features of user-generated reviews affect hotel room sales. We use these estimates to compute the average consumer surplus from transactions in each hotel. Based on the estimation of consumer surplus, we propose a new ranking system for displaying hotels in response to a search query on a travel search engine. By doing so, one can provide customers with the “best-value” hotels early on, thereby improving the quality of online hotel search compared to existing systems. Several experiments with users suggest that our ranking system does better than existing systems.

For a copy of the complete paper, please email swattal@temple.edu

February 19: Chris Forman to speak on The Internet and Local Wages: Convergence or Divergence?

By

Chris Forman

Associate Professor,

Georgia Institute of Technology

February 19, 2010

Alter Hall 405, 1000am – 1130am

Abstract

Did the diffusion of the Internet lead to convergence or divergence of local wages? We examine the relationship between business use of advanced Internet technology and regional variation in US wage growth between 1995 and 2000. We show that business use of advanced Internet technology is associated with wage growth but find no evidence that the Internet contributed to regional wage convergence. Advanced Internet technology is only associated with wage growth in places that were already well off in terms of income, education, population, and industry. Overall, advanced Internet explains one-quarter of the difference in wage growth between these counties and all others.

For a copy of the paper, click here.

Molly Wasko to speak on Network Governance in Open Source Software Development

By

Network Governance in Open Source Software Development

Molly Wasko

Associate Professor, Department of Management
College of Business, Florida State University

January 29, 2010

Alter Hall 405, 1000am – 1130am

Abstract

Open source software (OSS) development projects are typically comprised of a network of volunteers bound together by social structures rather than contractual obligations.  Understanding how OSS projects engage in self-governance, by relying on social influences to coordinate the efforts of individuals through technology-enabled network forms of organization, has become increasingly important for organizations seeking to make sense of the future of knowledge-intensive work.  Based on the theoretical framework of network governance, this study examines 1) whether social controls and trust influence coordination and conflict management among open source software project members, and 2) whether coordination and conflict management affect project success.  Using survey, social network and objective data from 39 open source projects, this study empirically tests a path model examining 1) the influence of structural embeddedness (the centralization and density of the discussion forum communication network) on the development of social controls (restricting access to the development team, the use of collective sanctions and concern about individual reputation) and on the development of relational ties between network members (trust); 2) the impact of social controls and trust on the project’s coordination (expertise and project) and conflict management; and 3) the influence of coordination and conflict management on project success.  The results indicate that higher levels of density in the communication network predict greater concerns about individual reputation in the network.  Contrary to expectations, higher network density is related to less restricted access to the development team, and network centralization has a negative relationship with concern about reputation.  Restricted access, concern about reputation, and trust lead to better coordination.  The results also provide evidence that better coordination enhances project success, but not the ability to manage conflict within the project.

For a copy of the full paper, click here.