The Subjective Value of Information: Trading expertise vs. content, copies vs. originals in E-Business

What is the subjective value assigned to information? Is the subjective value of information similar to the realistic or normative value, or are there deviations introduced by human processing, the framing of the information source, or the external qualities of packaging and ownership of the information? Do people assess information as having the same value when offered the chance to sell it (Willingness to Accept, WTA) as when facing the need to buy it (Willingness to Purchase, WTP)? This is an empirical, experimental investigation of the effects of expertise vs. content, and copy vs. exclusive original packaging of information on the WTA/WTP ratio. In an animated computer simulation of a business game players maximize their profits by making choices regarding inventory and prices. Participants were also offered the chance to bid in trade (buy or sell) information regarding the weather that may affect demand. We find, as hypothesized, that the subjective value of information does indeed follow the predictions of Endowment Effect theory. Participants revealed a ratio of Willingness to Accept to Willingness to Purchase (WTA/WTP) that resembles the ratio common in the case of private goods. In the decisions, choices and performance recorded for the 294 subjects, we also found support for the hypothesis that the WTA/WTP diverges from unity more often and in a more pronounced manner for information traded in the “original” form rather than as a copy of the original, although even for copies the WTA/WTP ratio is still double. Results yield a value of about three for the WTA/WTP ratio for original information regardless of whether the source is content or expertise. Valuations of content and expertise did not diverge. However, the source of information can be manipulated by system design to become more salient. Copy information received a subjective value which was significantly different (lower) than original information. Implications for both online trading and online sharing of information are discussed

Experimental Investigation of the Subjective Value of Information in Trading

Subjective judgments regarding information are important for the design of information systems. This study examines the endowment effect in the context of evaluating information. Theoretically, value judgments that affect the demand for information are influenced by ownership rights, a phenomenon known as the endowment effect in trading situations. In a simple computer simulated business game, 31 participants conducted a management task in which they were provided opportunities to buy or sell information. The bidding mechanism was incentive compatible. Results show that, in agreement with endowment effect theory, people value information they own much more than information they do not own. This portends undertrading in information. Therefore, the subjective value of information should be considered in the design of systems. Our findings indicate a place for the subjective value of information on the WTA/WTP ratio continuum that emerges from pertinent literature. The ratio for information is similar to that of market goods. Participants had a strong inclination to purchase but not to sell information even though the profit data suggests that the use of information had no objective benefit. This preference is attributed to risk aversion rather than to loss aversion, which is the most widely accepted explanation of the endowment effect. The subjective value of information can, therefore, be affected by system design

Tailoring a Points Scoring Mechanism for Crowd-Based Knowledge Pooling

We address the design of point scoring mechanisms in games for crowds, to promote user motivations to contribute knowledge. We measure the effectiveness of the scoring mechanism on users’ performance across three types of crowd: general public, students in their field of study, general students. The conditions were: reward-free games (control group) and two reward-based systems differing in the algorithm applied (linear y=3x vs. exponential y=6ex). Results support the importance of the mathematical function of scores assignment as a motivator for knowledge contribution, and indicate that the effect of the scoring mechanism design should be tailored according to the type of crowd. These findings provide insights for designers of gamified systems on how to improve knowledge contributions in crowd-based systems

Subjective Value of Information: The Endowment Effect

Value judgments about information and its value are vital for a functioning information society. Subjective valuations, formulated by individuals determine the demand for information and trading in it. Theoretically, these subjective value determinations should be influenced by ownership rights, a phenomenon coined the "Endowment Effect" in psychological study of trading situations. This study examines the Endowment Effect in the context of evaluating information. In a simple computer simulated game fifty five participants conducted a task in which they were provided opportunities to buy or sell information. The bidding mechanism was incentive compatible. Results show that, in agreement with Endowment Effect theory, people value information they own much more than information not owned by them. Our findings indicate that the ratio between Willingness to Accept (WTA) and Willingness to Purchase (WTP) for information is similar to that for market goods, and as with market goods, other than rational. Participants exhibited a strong inclination to purchase but not to sell information even though profit data suggests that the use of information had no objective benefit for profit-making. This preference is attributed to risk aversion rather than to loss aversion which is the most widely-accepted explanation of the Endowment Effect. Holding on to information and undertrade in it have strong implications for the information society

the Information Society

This study examines the chronemics (time related messages) of response latencies in asynchronous computer-mediated communication (CMC) by analyzing three datasets comprising a total of more than 150,000 responses: email responses created by corporate employees, responses created by university students in course discussion groups, and responses to questions posted in a public, commercial online information market. Mathematical analysis of response latencies reveals a normative pattern common to all three datasets: The response latencies yielded a power-law distribution, such that most of the responses (at least 70%) were created within the average response latency of the responders, while very few (at most 4%) of the responses were created after a period longer than 10 times the average response latency. These patterns persist across diverse user populations, contexts, technologies, and average response latencies. Moreover, it is shown that the same pattern appears in traditional, spoken communication and in other forms of online media such as online surveys. The implications of this uniformity are discussed, three normative chronemic zones are identified, and a quantitative definition for online silence is proposed. Implications for educators and administrators working with online students and with online teaching staff are discussed