Transaction Streams: Definition and Implications for Trust in Internet-Based Electronic Commerce.

In this paper we analyze how transactions related to the exchange of goods and services are being performed on the Internet. The adoption of electronic markets in an industry has a disintermediation potential because it can create a direct link between the producer and the consumer (without the need for the intermediation role of distributors). Electronic markets lower the search cost, allowing customers to choose among more providers (which ultimately reduces both the costs for the customer and the profits for the producer). In this paper we contend that electronic markets on the Internet have the opposite effect, resulting in our increase in the number of intermediators. We introduce transaction streams, which model how transactions are being conducted and help explain the types of new intermediators that are appearing on the Internet. We also describe mechanisms by which companies are exploring ways of extending transaction streams. To illustrate the model and validate our findings, we analyze transaction streams in the insurance industry and review associated concepts such as trust and brands.transactions; electronic markets;

Appropriating Value From CRS Ownership in the Airline Industry

It is difficult for the firm competing through information technology (IT) resources to gain a sustainable advantage because systems are easy to imitate and often substitute resources are available to competitors. The innovator may be unable to appropriate all of the benefits from IT investments. Airlines have installed computerized reservations systems (CRSs) in travel agencies in order to appropriate the returns from their investments in information technology. The airlines expected to obtain a number of benefits from this strategy including increased efficiency, possible bias in favor of the CRS owner on the part of the travel agent, and fees from other airlines for making reservations for them. The purpose of this paper is to evaluate the appropriation of value by CRS owners from deploying systems in travel agencies. These benefits, beyond fees from travel agents, should be seen in the vendor airline's market share between cities and in the overall performance of the airline at an industry level. This paper models airline performance as a function of CRS ownership at two levels: for selected city-pairs and at the overall level of the firm. The city-pair analysis employs a multinomial logit (MNL) market share model that analyzes five years of data on 72 city-pair routes. The industry model uses longitudinal data for a panel of ten airlines for twelve years. The results of both analyses support hypotheses that CRS ownership is positively related to airline performance. It appears that strong airlines have appropriated the benefits of their CRSs, turning them into highly specialized assets for further travel-related innovation. This work offers useful theoretical extensions and methodological approaches for the study of similar kinds of network technology innovations that are currently being deployed in association with electronic commerce on the Internet.Information Systems Working Papers Serie

APPROPRIABILITY AND THE INDIRECT VALUE OF CRS OWNERSHIP IN THE AIRLINE INDUSTRY

It is difficult for the firm investing in information technology (IT) to appropriate a1 of the benefits from its investment for itself- it is very easy to imitate innovations in IT. Airlines have installed computerized reservations systems (CRSs) in travel agencies in order to appropriate the returns from their investments in information technology. The airlines expected to obtain a number of benefits from this strategy including increased efficiency, possible bias in favor of the CRS owner on the part of the travel agent, and fees from other airlines for making reservations for them. The purpose of this paper is to evaluate the impact of the indirect (non-fee) benefits to CRS owners from deploying systems in travel agencies. These indirect benefits should be seen in the vendor airline's market share between cities and in the overall performance of the airline at an industry level. This paper models airline performance as a function of CRS ownership at two levels: for selected city-pairs and at the overall level of the firm. The city-pair analysis employs a multinomial logit market share model using five years of data on 72 routes. The industry model uses longitudinal data for a panel of ten airlines for twelve years. The results of both analyses support hypotheses that CRS ownership is positively related to airline performance, It appears that strong airlines have appropriated the indirect benefits of their CRSs, turning them into highly specialized assets for further travel-related innovation.Information Systems Working Papers Serie

The strategic use of information in the airline industry

This thesis is an empirical investigation of the strategic use of information in the airline industry, and explores the development of competition in the airline industry from an information perspective. The research traces the evolution in the environmental conditions facing airlines from World War I to the present. The research also analyses evolution of the uses of information. Information is an enabler, allowing things to be done, but information can also be a resource in itself. The research finds growing strategic use of information from automation to using information as a resource for strategic flexibility. The main sources of information that airlines use in their strategic efforts are analysed, as well as the ways in which airlines procure this information and the uses they make of it in strategy. The research finds evidence of distinct phases in the evolution of the uses made of information by airlines. Crucial to airline strategic flexibility is local market information acquired informally. However, the evidence also illustrates the serious difficulties airlines face in using the external information about the markets in which they operate in their strategy. Different streams of academic literature support the findings of this empirical research