Effects of user experience on user resistance to change to the voice user interface of an in‑vehicle infotainment system: Implications for platform and standards competition

This study examines the effects of user experience on user resistance to change—particularly, on the relationship between user resistance to change and its antecedents (i.e. switching costs and perceived value) in the context of the voice user interface of an in-vehicle infotainment (IVI) system. This research offers several salient findings. First, it shows that user experience positively moderates the relationship between uncertainty costs (one type of switching cost) and user resistance. It also negatively moderates the association between perceived value and user resistance. Second, the research test results demonstrate that users with a high degree of prior experience with the voice user interface of other smart devices exhibit low user resistance to change to the voice user interface in an IVI system. Third, we show that three types of switching costs (transition costs, in particular) may directly influence users to resist a change to the voice user interface. Fourth, our test results empirically demonstrate that both switching costs and perceived value affect user resistance to change in the context of an IVI system, which differs from the traditional IS research setting (i.e. enterprise systems). These findings may guide not only platform leaders in designing user interfaces, user experiences, and marketing strategies, but also firms that want to defend themselves from platform envelopment while devising defensive strategies in platform and standards competition

Versioning, Brand-Stretching, and the Evolution of e-Commerce Markets

This paper offers an analysis of the evolution of e-commerce markets. We develop a model in which an initial group of small, no-name click firms create such markets by offering horizontally differentiated customized or versioned products and competing in prices. Subsequently, a traditional brick firm enters by stretching its brand name into the digital marketplace. Such entry causes many initial entrants to exit. Contrary to much popular and formal literature, we show that the volume of initial entry may well be inefficiently low despite the anticipated later exit. In addition, the conventional relationship between sunk cost and market structure is substantially weakened.versioning, brand-stretching, price discrimination, market structure

Innovation and Diffusion

The contribution made by innovation and new technologies to economic growth and welfare is largely determined by the rate and manner by which innovations diffuse throughout the relevant population, but this topic has been a somewhat neglected one in the economics of innovation. This chapter, written for a handbook on innovation, provides a historical and comparative perspective on diffusion that looks at the broad determinants of diffusion, economic, social, and institutional, viewed from a microeconomic perspective. A framework for thinking about these determinants is presented along with a brief nontechnical review of modeling strategies used in different social scientific literatures. It concludes with a discussion of gaps in our understanding and potential future research questions.

Contracts, Biases and Consumption of Access Services

We consider a consumption model that takes into account the valuation and demand uncertainties that consumers face while using access services. Typical examples of such services include telecommunication services, extended warranties for consumer electronics, and club memberships. We demonstrate that consumption is affected by contract structure (pay-peruse vs. three part tariffs) even if the optimal consumption plans are identical. We find that a majority of individuals correctly use a threshold policy that is similar to a nearly optimal heuristic, however they use the free units too quickly leading to overconsumption and lost surplus. These errors are partially driven by mistaken beliefs about the value distribution. We also measure subjectsâ willingness to pay for a contract with free access units, and we find that nearly half of subjects are willing to pay at least the full per-unit price, with a substantial fraction willing to overpay. The optimal firm strategy is therefore to offer a contract that presells access units at a very small discount; this strategy increases revenue by 8 − 15% compared to only offering a pay-per-use contract.access services, pricing contracts, decision biases, experiment

When being wasteful appears better than feeling wasteful

"Waste not want not" expresses our culture's aversion to waste. "I could have gotten the same thing for less" is a sentiment that can diminish pleasure in a transaction. We study people's willingness to "pay" to avoid this spoiler. In one scenario, participants imagined they were looking for a rental apartment, and had bought a subscription to an apartment listing. If a cheaper subscription had been declined, respondents preferred not to discover post hoc that it would have sufficed. Specifically, they preferred ending their quest for the ideal apartment after seeing more, rather than fewer, apartments, so that the length of the search exceeds that available within the cheaper subscription. Other scenarios produced similar results. We conclude that people may sometimes prefer to be wasteful in order to avoid feeling wasteful.waste aversion, mental accounting, violation of dominance, counterfactual, regret

Understanding the Internet's relevance to media ownership policy: a model of too many choices

Does the Internet provide a failsafe against media consolidation in the wake of an easing of media ownership rules? This paper posits a model of news outlet selection on the Internet in which consumers experience cognitive costs that increase with the number of options faced. Consistent with psychological evidence, these costs may be reduced by constraining one’s choice set to “safe bets” familiar from offline (e.g., CNN.com). It is shown that, as the number of outlets grows, dispersion of consumer visitation across outlets inevitably declines. Consequently, independent Internet outlets may fail to mitigate lost outlet independence on other media.Choice framing; Media ownership; Internet; Differentiated products; Location models

FDI, International Trade and Union Collusion

This paper deals with firms’ decision related to international activities in a twocountry oligopoly model with a homogeneous product and unionized labor markets. Using a three-stage non-cooperative game with firms being first movers, it is found that firms’ strategies are affected by the scale of fixed costs of direct investments, trade costs and union wage strategies in labor markets, giving rise to different productive structures in equilibrium. Scopes and incentives for unions’ collusion are analyzed. The consequences on national welfare levels of both unions and firms’ strategic behavior are also investigated, deriving some policy insights.Foreign Direct Investment, International trade, Collusion, Labor unions

Behavioral Science and Consumer Standard Form Contracts

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