DO INFORMATION TECHNOLOGY INVESTMENTS LEAD TO BIGGER OR SMALLER GOVERNMENTS? – THEORY AND EVIDENCE IN U.S. STATE GOVERNMENTS

Government growth has been a long-standing research issue among public economists as well as an important concern of the general public. This paper investigates the impact of government IT investments on government growth. Drawing on the literature on public economics, political sciences, and IT value, I offer theoretical discussions and four mechanisms as to the relationship between IT investments and government expenditures, leading to two competing hypotheses that IT investments either expand or shrink the amount of government expenditures. Using data on IT investments, state government finances, demography, and other institutional and socioeconomical factors, I test which prediction prevails in the context of U.S. state governments. The empirical investigations support the hypothesis that greater IT investments are associated with smaller state government size, measured as a ratio of annual total expenditures to state gross domestic product

Complementary Online Services in Competitive Markets: How Firms Should Adjust Their Strategies Due to Network Effects

A growing number of firms are strategically utilizing IT and the Internet to provide online services to consumers who buy their products. Online services differ from traditional services, such as maintenance services, because they often promote interactivity among the firm’s customers and exhibit positive network effects. In this paper, we model the competition between two firms that sell a differentiated product, when each firm can offer a complementary online service to its customers. We examine how the market equilibrium changes when the service exhibits network effects, and determine how firms should adjust their strategies to account for such effects. Specifically, we find that when the service exhibits network effects, a firm’s decision whether to offer the service depends on the competitor’s decision as well as on the competitor’s service quality. When the service does not exhibit network effects, this is not the case. In addition, if the service exhibits network effects the two firms may be caught in a Prisoner’s Dilemma; a situation that does not arise in the absence of network effect. We also show that technological progress that enhances the value of the network to consumers can reduce firms’ profits when both offer the service. An increase in the size of the market can also have a negative effect on profits when the service exhibits network effects, but not otherwise. Finally, unlike previous works on products with network effects, showing under-provision in the context of a monopoly, we show that both under- and over-provision of services can arise in a competitive setting.http://deepblue.lib.umich.edu/bitstream/2027.42/83510/1/1155_Etzion.pd

Analyzing Pricing Strategies for Online-Services with Network Effect

In this study, we model firms that sell a product and a complementary online service, where only the latter displays positive network effects. That is, the value each consumer derives from the service increases with the total number of consumers that subscribe to the service. In addition, the service is valuable only to consumers who buy the product. We consider two pricing strategies: 1) bundle pricing, in which the firm charges a single price for the product and the service; and 2) separate pricing, in which the firm sets the prices of the product and the service separately, and consumers self-select whether to buy both or only the product. We show that, in contrast to the common result in the bundling literature, often the monopolist chooses not to offer the bundle (he either sells the service separately or not at all) while bundling would increase consumer surplus and social welfare. Thus, under-provision of the service can be the market outcome. We also demonstrate that network effects may cause the under-provision of the service.http://deepblue.lib.umich.edu/bitstream/2027.42/83713/1/1156_Etzion.pd

Pricing of Products and Complementary Services: A Study of the Online Game Industry

We model a monopolist who offers a product and a complementary service, where only the latter exhibits positive network externalities. We focus on the online game industry as a representative case in which the product (the game), unlike the service (access to the interactive online play mode), has zero marginal cost, and consider two-potential pricing strategies: 1) the bundle pricing, in which the vendor charges a single price for the product and the service; and 2) the separate pricing, in which the vendor sets the prices of the product and the service separately. We find that, in contrast to the common result in the bundling literature, bundling may increase consumer surplus, while the monopolist chooses not to offer the bundle. We offer theoretical evidence that this is due to the presence of network externalities

That’s Mine! Employee Side Projects, Intellectual Property Ownership, and Innovation

Working on side projects outside their work hours is a growing trend for IT professionals. While employees might believe that everything they create in their spare time belongs to themselves, it is not always the case. In the legal case of Alcatel v. Brown, the court ruled that the employer owned rights to employees’ intellectual property including ideas of their side projects. Relatively little is known about how innovation activities are affected when employees are not allowed to retain the ownership of their intellectual property. We leverage the Alcatel v. Brown case as an exogenous shock and apply a difference-in-difference model to examine how the legal case affects innovation activities in different counties. We find that following Alcatel v. Brown, both patent counts and entrepreneurial activities decrease in counties where employees’ ownership of their intellectual property is not legally protected. We also find that the dampening effect is more pronounced in IT-related industries. Our work contributes to the literature on innovation management while providing practical implications for policy makers on intellectual property law

Implementation of a color-capable optofluidic microscope on a RGB CMOS color sensor chip substrate

We report the implementation of a color-capable on-chip lensless microscope system, termed color optofluidic microscope (color OFM), and demonstrate imaging of double stained Caenorhabditis elegans with lacZ gene expression at a light intensity about 10 mW/cm^2

A Practical Guide for Successful Revisions and Engagements with Reviewers

Revising a manuscript after receiving a revise-and-resubmit decision from a top-tier journal can be just as arduous as developing a new paper from scratch. In this editorial, based on our experiences revising papers over the years, we provide roadmaps and guidelines for completing successful revisions for top journals. In doing so, we offer practical tips for completing three major tasks—making sense of a review packet, revising a manuscript, and crafting responses to reviewer comments. We conclude by recommending that authors be active reviewers themselves because, by doing so, they can develop their own insights on how peer review works and become more skillful at revising their papers and responding to reviewers