Competitive Benchmarking: An IS Research Approach to Address Wicked Problems with Big Data and Analytics

Wicked problems like sustainable energy and financial market stability are societal challenges that arise from complex socio-technical systems in which numerous social, economic, political, and technical factors interact. Understanding and mitigating them requires research methods that scale beyond the traditional areas of inquiry of Information Systems (IS) “individuals, organizations, and markets” and that deliver solutions in addition to insights. We describe an approach to address these challenges through Competitive Benchmarking (CB), a novel research method that helps interdisciplinary research communities to tackle complex challenges of societal scale by using different types of data from a variety of sources such as usage data from customers, production patterns from producers, public policy and regulatory constraints, etc. for a given instantiation. Further, the CB platform generates data that can be used to improve operational strategies and judge the effectiveness of regulatory regimes and policies. We describe our experience applying CB to the sustainable energy challenge in the Power Trading Agent Competition (Power TAC) in which more than a dozen research groups from around the world jointly devise, benchmark, and improve IS-based solutions

Accounting for changes in biodiversity and ecosystem services from a business perspective

Biodiversity refers to the dynamics of interactions between organisms in changing environments. Within the context of accelerating biodiversity loss worldwide, firms are under increasing pressures from stakeholders to develop appropriate tools to account for the nature and consequences of their actions, inclusive of their influences on ecosystem services used by other agents. This paper presents a two-pronged approach towards accounting for changes in biodiversity and ecosystem services from a business perspective. First, we seek to analyze how Environmental Management Accounting (EMA) may be used by firms to identify and account for the interactions between their activities and biodiversity and ecosystem services (BES). To that end, we use dairy farming as a case study and propose general recommendations regarding accounting for changes in biodiversity and ecosystem services from a management accounting perspective. Secondly, after discussing the corporate reporting implications of the main environmental accounting approaches, we propose the underlying principles and structural components of a Biodiversity Accountability Framework (BAF) which would combine both financial and BES data sets; hence, suggesting the need for changes in business accounting and reporting standards. Because this would imply significant changes in business information systems and corporate rating practices, we also underline the importance of making the associated technological, organizational and institutional innovations financially viable. The BAF should be designed as an information base, coconstructed with stakeholders, for setting up and managing new modes of regulation combining tools for mitigating BES loss and remunerating BES supply.Accounting, business, biodiversity, ecosystem services, indicators, management accounting, financial accounting, reporting, corporate social responsibility, standards, biodiversity accountability framework.

Economic issues in distributed computing

textOn the Internet, one of the essential characteristics of electronic commerce is the integration of large-scale computer networks and business practices. Commercial servers are connected through open and complex communication technologies, and online consumers access the services with virtually unpredictable behavior. Both of them as well as the e-Commerce infrastructure are vulnerable to cyber attacks. Among the various network security problems, the Distributed Denial-of-Service (DDoS) attack is a unique example to illustrate the risk of commercial network applications. Using a massive junk traffic, literally anyone on the Internet can launch a DDoS attack to flood and shutdown an eCommerce website. Cooperative technological solutions for Distributed Denial-of-Service (DDoS) attacks are already available, yet organizations in the best position to implement them lack incentive to do so, and the victims of DDoS attacks cannot find effective methods to motivate the organizations. Chapter 1 discusses two components of the technological solutions to DDoS attacks: cooperative filtering and cooperative traffic smoothing by caching, and then analyzes the broken incentive chain in each of these technological solutions. As a remedy, I propose usage-based pricing and Capacity Provision Networks, which enable victims to disseminate enough incentive along attack paths to stimulate cooperation against DDoS attacks. Chapter 2 addresses possible Distributed Denial-of-Service (DDoS) attacks toward the wireless Internet including the Wireless Extended Internet, the Wireless Portal Network, and the Wireless Ad Hoc network. I propose a conceptual model for defending against DDoS attacks on the wireless Internet, which incorporates both cooperative technological solutions and economic incentive mechanisms built on usage-based fees. Cost-effectiveness is also addressed through an illustrative implementation scheme using Policy Based Networking (PBN). By investigating both technological and economic difficulties in defense of DDoS attacks which have plagued the wired Internet, our aim here is to foster further development of wireless Internet infrastructure as a more secure and efficient platform for mobile commerce. To avoid centralized resources and performance bottlenecks, online peer-to-peer communities and online social network have become increasingly popular. In particular, the recent boost of online peer-to-peer communities has led to exponential growth in sharing of user-contributed content which has brought profound changes to business and economic practices. Understanding the dynamics and sustainability of such peer-to-peer communities has important implications for business managers. In Chapter 3, I explore the structure of online sharing communities from a dynamic process perspective. I build an evolutionary game model to capture the dynamics of online peer-to-peer communities. Using online music sharing data collected from one of the IRC Channels for over five years, I empirically investigate the model which underlies the dynamics of the music sharing community. Our empirical results show strong support for the evolutionary process of the community. I find that the two major parties in the community, namely sharers and downloaders, are influencing each other in their dynamics of evolvement in the community. These dynamics reveal the mechanism through which peer-to-peer communities sustain and thrive in a constant changing environment.Information, Risk, and Operations Management (IROM

A theoretical and computational basis for CATNETS

The main content of this report is the identification and definition of market mechanisms for Application Layer Networks (ALNs). On basis of the structured Market Engineering process, the work comprises the identification of requirements which adequate market mechanisms for ALNs have to fulfill. Subsequently, two mechanisms for each, the centralized and the decentralized case are described in this document. These build the theoretical foundation for the work within the following two years of the CATNETS project. --Grid Computing

Opinion Formation and Herding in Financial Markets

In financial markets, every investor seeks and receives information to decide how they should act (e.g., buy or sell a certain asset). In certain social circles, investors also learn about the decisions of other investors and they might sometimes ignore their own information and take the same decisions as other investors. This phenomenon is known as ”herding effect”. Many believe that herding can be one of the main causes of crashes and bubbles in financial markets.In this thesis, we adopt empirical methods to explore why investors try to imitate others, the impact of herding on financial markets and whether the trading mechanism used in the market affects herding.Towards this goal, we connect opinion formation dynamics with herding in financial markets. We model social connections between the traders in different market environment as a graph and adopt a well-established opinion diffusion dynamics. Opinions are translated to trading positions and market prices evolve accordingly. We relate the shape of the graph social network to the equilibria of a game defined as follows. The players are traders that can strategically decide whether to follow the wisdom of the crowd or act upon their own beliefs.Their payoffs are defined as the wealth they accumulate from trading. We adopt Empirical Game-Theoretic Analysis (EGTA) to compute the equilibria of our games.We first explore the impact of social connections between market participants on herding and market stability in a hypothetical market environment, where orders are always executed at the desired price. We show that the larger the traders’ neighbourhood in the social network, the more the traders are willing to imitate others and the less volatile the stock price is. However, when every trader in the market has perfect knowledge of the opinions of all the other traders, the market will still exhibit crashes and bubbles. The definitions of crashes and bubbles in our research are based on changes in stock prices and are inspired by the financial concept of Maximum Drawdown.The mechanics of trading in an order-driven market environment can influence the behaviour of traders and the idealised setting in our simulated market environment is too simplistic to model real markets. We then investigate opinion formation and herding in order-driven financial markets, which are widely used for many asset classes. We concentrate on Continuous Double Auctions, the principle trading mechanism in this class, and consider two forms of order queuing mechanisms: price-time priority, the de-facto standard, and spread-price/time priority, an alternative recently defined in literature to reduce toxic order flows due to latency arms race. We find that our conclusions are robust and hold in both these realistic market environments; the stronger the social connections between the agents, the more pronounced the herding. Furthermore, our empirical research shows that as the market gives more weight to spread, it becomes more stable thus confirming the findings of related work in our setup.We conclude our work by enlarging the set of strategies that agents use. We use a meta-game to simplify the actual large game and explore herding of different types of investors in the market with different social connections. The results show that the herding is more pronounced among long-term investors than short-term investors. We see our work as the introduction of a framework that can be used to study more questions about herding in financial markets and other complex systems

Operating market based regulation service using software agents compliant with NERC\u27s control performance standards

With the changing scenario for procurement of energy it becomes necessary to understand the process of obtaining energy from a diverse set of suppliers capable of providing substantial amounts of electric power at competitive prices. Sufficient insight has been gained in the energy brokerage system design and planning owing to experiences in the recently established markets especially the California market. It becomes contextual to analyze and understand the procurement of ancillary services, which are generally bundled as part of the wholesale energy supply chain, using a similarly competitive environment having a number of players that provide electric power for such services.;The objectives of this thesis are: (1) to provide a simulation package for conducting competitive auctions using software agents for the regulation service auction market, and (2) to demonstrate the compliance of a power system, employing Automatic Generation Control with parameters obtained from such a market, with North American Electric Reliability Council\u27s performance standards. The package employs a flexible and extensible Java-based agent development environment, MADKIT, to simulate the auctions for regulation service, and MATLAB/SIMULINK models with a fuzzy controller to simulate the power system. The framework is tested using a sample three-area power system, where the parameters for regulation service in the second area are obtained from a competitive auction market. A bidding strategy based on fuzzy logic is also designed and tested for ensuring good profit for a bidding supplier in the auctions

Theoretical and Computational Basis for Economical Ressource Allocation in Application Layer Networks - Annual Report Year 1

This paper identifies and defines suitable market mechanisms for Application Layer Networks (ALNs). On basis of the structured Market Engineering process, the work comprises the identification of requirements which adequate market mechanisms for ALNs have to fulfill. Subsequently, two mechanisms for each, the centralized and the decentralized case are described in this document. --Grid Computing