Information Complements, Substitutes, and Strategic Product Design

Competitive maneuvering in the information economy has raised a pressing question: how can firms raise profits by giving away products for free? This paper provides a possible answer and articulates a strategy space for information product design. Free strategic complements can raise a firm's own profits while free strategic substitutes can lower profits for competitors. We introduce a formal model of cross-market externalities based in textbook economics -- a mix of Katz & Shapiro network effects, price discrimination, and product differention -- that leads to novel strategies such as an eagerness to enter into Bertrand price competition. This combination helps to explain many recent firm strategies such as those of Microsoft, Netscape (AOL), Sun, Adobe, and ID. We also introduce the concept of a ''content-creator'' who adds value for end-consumers but may not be paid directly. Similar to the case of product dumping, this research implies that both firms and policy makers need to consider complex market interactions to grasp information product design and profit maximization. The model presented here argues for three simple and intuitive results. First, a firm can rationally invest in a product it intends to give away into perpetuity even in the absence of competition. The reason is that increased demand in a complementary goods market more than covers the cost of investment in the free goods market. Second, we identify distinct markets for content-providers and end-consumers and show that either can be a candidate for the free good. The decision on which market to charge rests on the relative elasticities as governed by their network externality effects. If the externality effect is sufficiently great, the market with the higher elasticity is the market to subsidize with the free good. It is also possible to charge both markets but to keep one price artificially low. Importantly, the modeling contribution is distinct from tying in the sense that consumers need never purchase both goods -- unlike razors and blades, the products are stand-alone goods. It also differs from multi-market price discrimination in the sense that the firm may extract no consumer surplus from one of the two market segments, implying that this market would have previously gone un-served. Third, a firm can use strategic product design to penetrate a market that becomes competitive post-entry. The threat of entry is credible even in cases where it never recovers its sunk costs directly. The model therefore helps to explain several interesting market behaviors such as free goods, upgrade paths, split versioning, and strategic information substitutes.http://deepblue.lib.umich.edu/bitstream/2027.42/39683/3/wp299.pd

Information Complements, Substitutes, and Strategic Product Design

Competitive maneuvering in the information economy has raised a pressing question: how can firms raise profits by giving away products for free? This paper provides a possible answer and articulates a strategy space for information product design. Free strategic complements can raise a firm's own profits while free strategic substitutes can lower profits for competitors. We introduce a formal model of cross-market externalities based in textbook economics -- a mix of Katz & Shapiro network effects, price discrimination, and product differention -- that leads to novel strategies such as an eagerness to enter into Bertrand price competition. This combination helps to explain many recent firm strategies such as those of Microsoft, Netscape (AOL), Sun, Adobe, and ID. We also introduce the concept of a ''content-creator'' who adds value for end-consumers but may not be paid directly. Similar to the case of product dumping, this research implies that both firms and policy makers need to consider complex market interactions to grasp information product design and profit maximization. The model presented here argues for three simple and intuitive results. First, a firm can rationally invest in a product it intends to give away into perpetuity even in the absence of competition. The reason is that increased demand in a complementary goods market more than covers the cost of investment in the free goods market. Second, we identify distinct markets for content-providers and end-consumers and show that either can be a candidate for the free good. The decision on which market to charge rests on the relative elasticities as governed by their network externality effects. If the externality effect is sufficiently great, the market with the higher elasticity is the market to subsidize with the free good. It is also possible to charge both markets but to keep one price artificially low. Importantly, the modeling contribution is distinct from tying in the sense that consumers need never purchase both goods -- unlike razors and blades, the products are stand-alone goods. It also differs from multi-market price discrimination in the sense that the firm may extract no consumer surplus from one of the two market segments, implying that this market would have previously gone un-served. Third, a firm can use strategic product design to penetrate a market that becomes competitive post-entry. The threat of entry is credible even in cases where it never recovers its sunk costs directly. The model therefore helps to explain several interesting market behaviors such as free goods, upgrade paths, split versioning, and strategic information substitutes.

The use of ERTS-1 to more fully utilize and apply marine station data to the study and productivity along the eastern shelf waters of the United States

The author has identified the following significant results. Sea truth data were obtained during two ERTS overpasses in waters near the entrance of the Chesapeake Bay. Correlations were made between total phytoplankton and chlorophyll values in these waters to radiance detected by ERTS in an effort to map areas of similar productivity levels. Band 4 radiance had the highest correlation to all parameters with bands 5 and 6 showing decreasing correlations in each case. The radiance values were apparently influenced by one or more factors, most likely including the sediment content of the water. Data have shown that ERTS MSS is not suitable for monitoring chlorophyll in near-shore waters where sediment loads are high. It is suggested that in more seaward or pelagic locations, that ERTS MSS would be more efficient in monitoring surface chlorophyll values and establishing direct relationships to phytoplankton concentrations

A survey of the problem and research needs in the coastal zone

Coastal zone oceanography emphasizing pollution and geological processes - bibliograph

Imaging X-ray spectrometer

An X-ray spectrometer for providing imaging and energy resolution of an X-ray source is described. This spectrometer is comprised of a thick silicon wafer having an embedded matrix or grid of aluminum completely through the wafer fabricated, for example, by thermal migration. The aluminum matrix defines the walls of a rectangular array of silicon X-ray detector cells or pixels. A thermally diffused aluminum electrode is also formed centrally through each of the silicon cells with biasing means being connected to the aluminum cell walls and causes lateral charge carrier depletion between the cell walls so that incident X-ray energy causes a photoelectric reaction within the silicon producing collectible charge carriers in the form of electrons which are collected and used for imaging

Analysis of Power-aware Buffering Schemes in Wireless Sensor Networks

We study the power-aware buffering problem in battery-powered sensor networks, focusing on the fixed-size and fixed-interval buffering schemes. The main motivation is to address the yet poorly understood size variation-induced effect on power-aware buffering schemes. Our theoretical analysis elucidates the fundamental differences between the fixed-size and fixed-interval buffering schemes in the presence of data size variation. It shows that data size variation has detrimental effects on the power expenditure of the fixed-size buffering in general, and reveals that the size variation induced effects can be either mitigated by a positive skewness or promoted by a negative skewness in size distribution. By contrast, the fixed-interval buffering scheme has an obvious advantage of being eminently immune to the data-size variation. Hence the fixed-interval buffering scheme is a risk-averse strategy for its robustness in a variety of operational environments. In addition, based on the fixed-interval buffering scheme, we establish the power consumption relationship between child nodes and parent node in a static data collection tree, and give an in-depth analysis of the impact of child bandwidth distribution on parent's power consumption. This study is of practical significance: it sheds new light on the relationship among power consumption of buffering schemes, power parameters of radio module and memory bank, data arrival rate and data size variation, thereby providing well-informed guidance in determining an optimal buffer size (interval) to maximize the operational lifespan of sensor networks