How do digital information good characteristics influence pace and modalities of international market entry?

The paper develops theory to propose how considering digital information good characteristics modify and extends existing explanations with regard to entry mode choices (in single markets) and internationalization paths (across countries). Explanations offered relate to network and lock-in effects, complementary infrastructure investments, branding, and customer learning – factors that are particular important for understanding international market entry of digital information good providers.MNCs; entry mode; learning; digital information goods

Determining knowledge-intensive companies acquisition value for M&A purposes : an intellectual capital approach

The acquisition price of knowledge-intensive companies in an M&A deal depends largely on the resultant operating synergies, i.e. the potential value knowledge companies can bring to the acquirer's existing businesses through the combination of both firms' assets. The value of knowledge companies basically resides in their innovation potential and human capital competencies. These intangibles are part of knowledge companies' intellectual capital, which is generally seen by market-established firms as the least resource- and time-consuming route to innovation. In this paper the author provides an alternative approach to valuation in order to assess the purchase price of a knowledge company in a merger or acquisition context. In particular, he analyzes the additional value a knowledge-intensive company can bring to the acquiring firm and how much of that value should be retained by the acquirer

The Economics of Internet Markets

The internet has facilitated the creation of new markets characterized by large scale, increased customization, rapid innovation and the collection and use of detailed consumer and market data. I describe these changes and some of the economic theory that has been useful for thinking about online advertising markets, retail and business-to-business e-commerce, internet job matching and financial exchanges, and other internet platforms. I also discuss the empirical evidence on competition and consumer behavior in internet markets and some directions for future research.internet, market, innovation, advertising, retail, e-commerce, financial exchanges

Searching the eBay Marketplace

This paper proposes a framework for demand estimation with data on bids, bidders' identities, and auction covariates from a sequence of eBay auctions. First the aspect of bidding in a marketplace environment is developed. Form the simple dynamic auction model with IPV and private bidding costs it follows that if participation is optimal the bidder searches with a "reservation bid" for low-price auctions. Extending results from the empirical auction literature and employing a similar two-stage procedure as has recently been used when estimating dynamic games it is shown that bidding costs are non-parametrically identified. The procedure is tried on a new data set. The median cost is estimated at less than 2% of transaction prices.search models; auctions; eBay; Internet auctions; econometrics of auctions; bidding costs; identification

How do digital information good characteristics influence pace and modalities of international market entry?

The paper develops theory to propose how considering digital information good characteristics modify and extends existing explanations with regard to entry mode choices (in single markets) and internationalization paths (across countries). Explanations offered relate to network and lock-in effects, complementary infrastructure investments, branding, and customer learning – factors that are particular important for understanding international market entry of digital information good providers

Complexity and complicity in mobile telecommunications : the effect of network externalities and isomorphic strategy

The new information economy acts as a microcosm where the dynamics of complexity are present through the pervasive effects of increasing returns. Network externalities are the ubiquitous force behind winner-takes-all scenarios where only the strongest firms survive. The effect is evident in cases such as Microsoft's quasi-monopoly and eBay's dominance of the consumer and small business auctions market. Interestingly however, many important industries exhibiting strong network externalities, have emerged with no dominant winner and the competitive environment is preserved. This empirical study of the UK mobile telecom industry, which tracks an 18-year history of the mobile network operators as well as the strategies and product diffusion patterns of the networks, found firms counteracting winner-takes-all forces. Results indicate the presence of complex adaptive behavior between competing firms. Strategies are reconfigured to ensure the collective survival of all operators in the industry. The probability that one firm will dominate and that the rest will fail is eliminated. A complex set of isomorphic strategies emerges at the levels of network platforms, technical standards and consumer platforms. Through strategic herding, network externalities are exploited to act for the benefit of the whole industry causing competitors' market shares to converge dramatically to equal levels.peer-reviewe

Emergent Behavior and Criticality in Online Auctions

The present work studies eBay online auctions as a complex system, where agents in form of sellers and bidders interact in a large number. In contrast to unintelligent agents of physical systems, humans have the choice between different possible rational strategies. The empirical findings in this work are the result of statistical analysis of two major sets of data with more than 200,000 auctions. Probability distribution functions and relations between different variables are studied. Statistical analysis of the eBay data shows that the probability density functions for a wide range of quantities follow rather simple functionalities like exponential and power laws. Similar power-law distributions were observed in physics when studying the behavior of systems at their critical points, related to second order phase transitions. Although lots of relations and distributions could be understood qualitatively and quantitatively, there exists, up to now, no unifying model, which describes all of the observations. As an application we have found that a kind of fraud known as shill bidding leads to significant deviations from the average behavior. eBay regarded as a complex system seems to have features of totally stochastic processes, irrational agents and fully rational agents altogether

Two-Tier Market Institutions

This paper models a hierarchical system for market governance. A monitoring agency detects any opportunistic behavior in each small sub- market or lower tier, using the superior information available at that level. Trade can occur across sub-markets. A small upper-level group of sub- market monitors arranges communication of the news of any cheating in one sub-market to all other sub-markets. I examine when and how such a system can overcome the diminishing returns to information acquisition and communication that have limited the scope and size of self-governing trading communities in the past. I then offer tentative suggestions for governance of globalized markets

Trading Posts in Cyberspace: Information Markets and the Construction of Proprietary Rights

Technological innovation is a predominant source of persistent economic growth. Endogenous factors, principally human capital, financial capital, and government intervention play an important role in how the innovation process can enhance welfare through the grant of intellectual property rights. However, the expansive reacts of such proprietary interests in cyberspace has important implications for how e-commerce might contribute to overall economic growth. Thus far, the scope of intellectual property rights in cyberspace has been examined in isolation from empirical data reflecting how businesses seek to create value and effectively capture the benefits that the Internet offers over real-space markets. This Article argues that expansive construction of intellectual property rights distorts the informational properties of such rights and reintroduces high search and use costs to transactions in cyberspace. It also deters development and use of innovative business strategies that could generate greater value from e-commerce. Consequently, there is a need for more government intervention in regulating competition for markets in cyberspace