DOES IT PAY TO SHROUD ADD-ON FEES?

Add-on pricing, also known as drip pricing, is a common practice whereby firms prominently post base prices yet are less forthcoming about add-on prices. Although some consumers find add-on prices before the purchase decision, others only discover the add-on prices later in the purchase process. This paper presents an analytical model predicting the profit and welfare implications of hidden add-on fees. Whereas practitioners posit that hidden add-on pricing benefits firms at the disadvantage of consumers, the consensus from the academic literature is that any gains from hidden add-ons are negated by competition in base prices. This paper has two main preliminary findings. First, it resolves discrepancy between theory and practice by finding a profit improvement effect of hidden add-on prices under circumstances for which prior literature predicts profit irrelevance. In this regard, the model identifies a new mechanism driving the profit-improvement result. Second, it finds when firms can be worse off by having more consumers uninformed of add-on pricing before choosing from which firm to buy. The findings have implications for managers considering hidden add-on pricing as well as policy makers who seek to regulate this practice

Multi-Channel Sequential Search with Application to Piracy

This paper presents a multi-channel search model, where each channel consists of multiple firms that are ex ante homogeneous to consumers. Consumers, nevertheless, ex ante can tell channels apart in the following aspects: search costs, product quality, product availability and price distributions. We first analyze the channel selection problem and show that a consumer’s optimal channel selection at any stage of the search is independent of found prices. We further show that the optimal channel choice can be determined using each channel’s reservation price and consumer valuation. We then apply this model to study the competition between legitimate and pirated products. One immediate result is reducing piracy services has no impact on consumers’ decision to pirate. When pirated products pose a threat, legitimate firms may respond by giving up low search cost consumers. This leads to the surprising result that piracy threat may induce firms to increase their product prices

SOCIAL PREFERENCES AND OPEN SOURCE SOFTWARE DEVELOPMENT

Open source software (OSS), and open innovation in general, has received increasing attention from both researchers and practitioners. Based on recent literature on social preference from behavior economics, we propose a finite-horizon dynamic model to study the interactions between OSS developers who are either purely self-interested or conditional cooperators. We find that selfinterested developers who are predicted to free ride under conventional analysis may contribute to a public good, and the existence of purely these developers may, under certain conditions, even benefit the provision of a public good. We further analyze how code architecture affects OSS development outcome and propose that a higher level of code modularity leads to more code contributions overall, due to the strategic behavior of self-interested developers. However, a right mix of the two types of developers plays a critical role for modular design to make an impact. The findings bear important theoretical as well as practical implications and provide guidelines for OSS development and the collective innovation in general

CODE ARCHITECTURE AND OPEN SOURCE SOFTWARE DEVELOPMENT

A model is developed to study how the code architecture affects open source software (OSS) development. The model incorporates the resource heterogeneity and diverse motivations of various groups of programmers as well as the strategic interactions among them. We argue that the major advantage brought by a modular architecture of OSS code base is that it reduces both the cognitive cost and the coordination cost associated with OSS development, thus allowing programmers more easily to locate, manage, and contribute to the code base. We show that in OSS development, while modular architecture can potentially increase code contribution, it does not necessarily reduce free-riding; in fact it may well increase free-riding due to the strategic interactions among the programmers. We further empirically test the predictions using the SourceForge OSS development data, and the results confirm our theoretical predictions. The findings bear important theoretical as well as practical implications and provide guidelines for practitioners of OSS development and the collective innovation in general

Interactive Digital Entertainment: A New Direction for Information Systems Research

Interactive digital entertainment (IDE) includes Internet-based gaming, wireless gaming, online discussion clubs for sports or music fans, and any other form of consumer-to-consumer (C2C) entertainment that involves human-computer or human-human interaction via the Internet (or wireless). According to a recent article in Financial Times (Foremski et al. 2003), the corporate spending on IT has become stagnant in recent years while the market for consumer technologies maintains a strong growth trend. IDE is an especially bright spot among the fastest growing business models targeting the consumer market (Black 2003). For instance, 5 years into the U.S. market, Sony’s popular online game, EverQuest, has already attracted 400,000 subscribers and is expected to earn Sony up to $500 million in 8 years (Hardy 2004). This stellar growth is not without problems: many early business developments on IDE, even the ones from the largest and most experienced game developers such as Electronic Arts, have faltered. These failures can cost IDE companies tens of millions of dollars (Hardy 2004). Past failures and successes seem to suggest that the success of IDE depends not only on solid IDE systems development that deliver competitive technological performance and enduring entertainment content, but also on deep compre- hension of IDE systems adoption and usage by consumers who ultimately decide the fate of any IDE product. Newer generations of IDE systems, such as World of Warcrafts from Blizzard Entertainment, have greatly improved their technological performance by tapping into the latest computing and communication technologies. Nevertheless, huge gaps exist in our understanding of how to make IDE systems and content more entertaining while controlling the development cost. Furthermore, IDE providers often fail to capitalize on their investment. For instance, Internet-based board games, while popular, have contributed little profit to vendors as consumers generally shun fee-based games. Finally, there is a lack of understanding about the roles of IDE com- munities in IDE markets. After all, IDE users typically interact with a community of peers, a feature that distinguish IDEs from stand-alone entertainment or TV-based entertainment. The purpose of this panel is to bring together industry experts and IS researchers to (1) introduce the development of the IDE industry to an IS audience and discuss the problems encountered in this development process, (2) lay out an array of new research venues around IDE systems and communities, and (3) discuss the impact of IDE on individuals and the society

Transformation of worst weed into N-, S-, and P-tridoped carbon nanorings as metal-free electrocatalysts for the oxygen reduction reaction

Substituting sustainable/cost-effective catalysts for scarce and costly metal ones is currently among the major targets of sustainable chemistry. Herein we report the synthesis of N-, S-, and P-tridoped, worst-weed-derived carbon nanorings (WWCNRs) that can serve as metal-free and selective electrocatalyst for the oxygen reduction reaction (ORR). The WWCNRs are synthesized via activation-free polymerization of worst weed, Eclipta prostrate, and then removal of the metallic residues by HCl. The WWCNRs exhibit good catalytic activity towards the 4 electron-transfer ORR with low onset potential and high kinetic limiting current density, along with high selectivity (introducing CO, the sample loses onl

Towards personalized data-driven bundle design with QoS constraint

Singapore National Research Foundation under its International Research Centre @ Singapore Funding Initiativ

Tirofiban for Stroke without Large or Medium-Sized Vessel Occlusion

The effects of the glycoprotein IIb/IIIa receptor inhibitor tirofiban in patients with acute ischemic stroke but who have no evidence of complete occlusion of large or medium-sized vessels have not been extensively studied. In a multicenter trial in China, we enrolled patients with ischemic stroke without occlusion of large or medium-sized vessels and with a National Institutes of Health Stroke Scale score of 5 or more and at least one moderately to severely weak limb. Eligible patients had any of four clinical presentations: ineligible for thrombolysis or thrombectomy and within 24 hours after the patient was last known to be well; progression of stroke symptoms 24 to 96 hours after onset; early neurologic deterioration after thrombolysis; or thrombolysis with no improvement at 4 to 24 hours. Patients were assigned to receive intravenous tirofiban (plus oral placebo) or oral aspirin (100 mg per day, plus intravenous placebo) for 2 days; all patients then received oral aspirin until day 90. The primary efficacy end point was an excellent outcome, defined as a score of 0 or 1 on the modified Rankin scale (range, 0 [no symptoms] to 6 [death]) at 90 days. Secondary end points included functional independence at 90 days and a quality-of-life score. The primary safety end points were death and symptomatic intracranial hemorrhage. A total of 606 patients were assigned to the tirofiban group and 571 to the aspirin group. Most patients had small infarctions that were presumed to be atherosclerotic. The percentage of patients with a score of 0 or 1 on the modified Rankin scale at 90 days was 29.1% with tirofiban and 22.2% with aspirin (adjusted risk ratio, 1.26; 95% confidence interval, 1.04 to 1.53, P = 0.02). Results for secondary end points were generally not consistent with the results of the primary analysis. Mortality was similar in the two groups. The incidence of symptomatic intracranial hemorrhage was 1.0% in the tirofiban group and 0% in the aspirin group. In this trial involving heterogeneous groups of patients with stroke of recent onset or progression of stroke symptoms and nonoccluded large and medium-sized cerebral vessels, intravenous tirofiban was associated with a greater likelihood of an excellent outcome than low-dose aspirin. Incidences of intracranial hemorrhages were low but slightly higher with tirofiban

Essays on the economics of electronic commerce

This research explores three frontier issues in electronic commerce using economics methods. First, we study bundling of large number of digital goods as a method for price discrimination. We show that prior literature has not properly considered the case where discounting effect exists, and give out examples where bundling is not the optimal choice for a seller. Second, we analyze the impact of resale on advance selling of single-time consumption goods. We point out that a resale market is often divisible, and a seller can often selectively allow or preclude part of the resale market. It turns out that partially allowing/precluding resale activities are sometimes beneficial to both sellers and buyers. Third, we propose a new market mechanism, Capacity Provision Networks, for Web caching trading. We then demonstrate the practical business viability of a cooperative CPN market.Management Science & Information System

Operationalizing the Essential Role of the Information Technology Artifact in Information Systems Research: Gray Area, Pitfalls, and the Importance of Strategic Ambiguity

In this paper we argue that a large gray area of information systems research exists, whose relevance to the information technology artifact is subject to significant debate even among IS scholars who support the essential role of the IT artifact. As we explain, not explicitly addressing this gray area can have negative, although often inadvertent, effects on the innovative nature of IS research; we explore this danger through three pitfalls. We then propose a stance of strategic ambiguity to deal with the gray area. Strategic ambiguity calls for deliberately withholding judgment on the relevance of research in the gray area and acceptance of gray-area research provided it meets the excellence required by professional journals. We believe that strategic ambiguity benefits innovative IS research without harming the essential role of the IT artifact