Essays on Mobile Networks and Applications

The explosive growth of mobile phone usage has opened up a huge market for innovative M-Commerce (Mobile Commerce) products and services. Emerging M-Commerce applications allow users to conduct retail transactions, utilize mobile payment services and receive subscription-based content services such as news, financial information, and entertainment. Additionally, the ability to obtain real-time information on the geographic location of users has introduced a market for location-based services like mobile advertising. While the outlook for M-Commerce appears promising, there are numerous problems that need to be addressed as mobile applications are developed and deployed. This dissertation is composed of three essays that focus on the economic and design issues of wireless networks and mobile applications. The first essay introduces a game theoretic model to understand location-based advertising (LBA) strategies for competing stores. Specifically, couponing strategies based on consumers’ physical location and store loyalty are studied. The second essay examines various economic models (buy, rent, or subscribe) and conditions for the optimal policy in the case of music downloads on mobile phones. The analytical framework provides pricing guidelines for the profit maximizing Digital Content Provider (DCP). The third essay provides solutions to an important optimization problem in wireless networks, known as the Minimum Energy Broadcasting (MEB) problem

Electronic Commerce, Consumer Search and Retailing Cost Reduction

This paper explains four things in a unified way. First, how e-commerce can generate price equilibria where physical shops either compete with virtual shops for consumers with Internet access, or alternatively, sell only to consumers with no Internet access. Second, how these price equilibria might involve price dispersion on-line. Third, why prices may be higher on-line. Fourth, why established firms can, but need not, be more reluctant than newly created firm to adopt e-commerce. For this purpose we develop a model where e-commerce reduces consumers' search costs, involves trade-offs for consumers, and reduces retailing costs.Comment: 29th TPRC Conference, 200

A Survey on the Economics of Behaviour-Based Price Discrimination

Economists have long been interested in understanding the profit, consumer surplus and welfare effects of an ancient marketing strategy: Price Discrimination. While it is not new that firms try frequently to segment customers in order to price discriminate, what has dramatically changed, with recent advances in information technologies, is the quality of consumer-specific data now available in many markets and how this information has been used by firms for price discrimination purposes. Specifically, thanks to information technology it is nowadays increasingly feasible for sellers to segment customers on the basis of their purchasing histories and to price discriminate accordingly. This form of price discrimination has been named in the literature as Behaviour-Based Price Discrimination (BBPD). For a long time economists have been concerned in understanding the economic effects of price discrimination in monopolistic markets. However, because imperfect competition is undoubtedly the most common economic setting, recent research on the field has been concerned with the following issues. Firstly, how are profit, consumer surplus and welfare affected when firms practice some form of price discrimination in imperfectly competitive markets? Secondly, in which circumstances may competitive firms have an incentive to price discriminate or rather to avoid it? As we will see, conclusions regarding the profit and welfare effects of price discrimination are strongly dependent upon the form of price discrimination, which in turn depends upon the form of consumer heterogeneity and the different instruments available for price discrimination. Basically, the aim of this survey is to clarify the two aforementioned issues in imperfectly competitive markets.

The Impact of E-Commerce Strategies on Firm Value: Lessons from Amazon.com

Managers would like to understand which strategies generate value in e-commerce environments, and researchers are just beginning to explore this issue. Which strategies are useful and which are not? In a step towards answering this question, we estimate the impacts of several competitive strategies on the value of Amazon.com, the well-known Internet retailer, during its first 1000 days as a publicly traded firm. The strategies analyzed include pricing, offline expansion, alliance formation, product line expansion, and service improvement. The results provide insight into the usefulness of various ways of competing online and could be useful for strategic planning in new Internet ventures.alliance; competitive advantage; competitive strategy; event studies; internet; valuation

The Virtual Location of E-Tailers: Evidence from a B2C E-Commerce Market

An Internet retailer?s (e-tailer?s) outstanding virtual location enhances the probability of being noticed by potential customers. The notion of a virtual location for e-tailers refers to the analogy to the physical location. In the empirical analysis, an e-tailer?s Internet search engine rank as well as its advertising activities in search engines serve as proxies for the virtual location. The results suggest that it is optimal for e-tailers to complement a high search engine rank with investments in online advertising. Moreover, banner ads seem to serve as price advertising mechanism, whereas sponsored links rather seem to be used in order to signal outstanding customer service. --virtual location,online advertising,search engines

Using big data for customer centric marketing

This chapter deliberates on “big data” and provides a short overview of business intelligence and emerging analytics. It underlines the importance of data for customer-centricity in marketing. This contribution contends that businesses ought to engage in marketing automation tools and apply them to create relevant, targeted customer experiences. Today’s business increasingly rely on digital media and mobile technologies as on-demand, real-time marketing has become more personalised than ever. Therefore, companies and brands are striving to nurture fruitful and long lasting relationships with customers. In a nutshell, this chapter explains why companies should recognise the value of data analysis and mobile applications as tools that drive consumer insights and engagement. It suggests that a strategic approach to big data could drive consumer preferences and may also help to improve the organisational performance.peer-reviewe

Electronic commerce, consumer search and reailing cost reduction

This paper explains four things in a unified way. First, how e-commerce can generate price equilibria, where physical shops either compete with virtual hops for consumers with Internet access, or alternatively, sell only to consumers with no Internet access. Second, how these price equilibria might involve price dispersion on-line. Third, why prices may be higher on-line. Fourth, why established firms can, but need not, be more reluctant than newly created firms to adopt ecommerce. For this purpose we develop a model where e-commerce reduces consumers’ search costs, involves trade-offs for consumers, and reduces retailing costs. Este trabajo explica, de manera unificada, cuatro cosas. Primero, cómo el comercio electrónico puede generar equilibrios de precios en los que las tiendas físicas compiten con las tiendas virtuales por los consumidores con acceso a Internet, o, alternativamente, venden sólo a los clientes que no tienen acceso a Internet. Segundo, cómo estos equilibrios de precios pueden generar dispersión de precios en Internet. Tercero, por qué los precios de las tiendas virtuales pueden ser más altos que los de las tiendas físicas. Y cuarto, por qué las empresas establecidas pueden tener menos incentivos que las empresas de nuevas creación para abrir tiendas virtuales. Para ello desarrollamos un modelo en el que el comercio electrónic o reduce los costes de búsqueda de los consumidores, implica un trade-off para los consumidores, y disminuye los costes de producción de las empresas.Electronic-Commerce, Search, Cost Reduction, Retailing

"To Sponsor or not to Sponsor: Sponsored Search Auctions with Organic Links"

In 2010 sponsored search advertisements generated over $12 billion in revenue for search engines in the US market and accounted for 46% of online advertising revenue. A substantial portion of this revenue was generated by the sale of search keywords using auction mechanism. We analyze a game-theoretic model to understand the interplay between organic and sponsored links in keyword auctions. Our model allows both the relevance of the advertising firm as well as the position of its sponsored link to impact click-through-rates. Our results demonstrate how the presence of organic links (links generated by the search engine algorithm) may lead to either more or less aggressive bidding for sponsored link positions depending on consumers attitudes toward sponsored links and the extent to which sponsored and organic links are complements or substitutes. In contrast to equilibrium results in existing literature, the firm with the highest value per click does not necessarily win the first spot in the sponsored search listing. It also may be optimal for a firm to bid an amount greater than the expected value (or sale) from a click.sponsored search, organic search, online advertising, keyword auction