Net Neutrality and its implications

The issue of net neutrality has the potential to alter the dynamics of accessing online content in the United States. As opposed to the status quo where requested packets are delivered to an online user as and when they arrive at the local internet service provider’s switching office, several broadband providers have proposed to charge online content providers for priority delivery of the latter’s content. Opponents of the proposal (i.e. the backers of the ‘net neutrality’ principle) want the Congress to implement legislation that would prevent the proposed priority delivery mechanism. The discussion has been fierce with numerous backers on either side, but a proper economic analysis seems to be missing in the debate. In this tutorial, we explain the concept of net neutrality and present the implications of such a proposal on the consumers, and identify the winners and losers of implementing such a delivery mechanism. We also discuss the broader implications of the net neutrality issue. We believe that as the thought leaders in the area, IS researchers have a unique role to bring a holistic perspective to the net neutrality debate

Internet providers have an economic incentive to offer some content at faster speeds

Only a strong net neutrality regime and its enforcement can avoid these undue advantages for ISPs, write Hong Guo and Subhajyoti Bandyopadhya

The Future of Personal Health Records in the Presence of Misaligned Incentives

We posit that the emergence of the independent personal health record (PHR) platforms is potentially a major development toward the cause of digitizing healthcare. Not only do these platforms empower the patients by giving them complete control over their records, but they also can help promote the adoption of electronic health records (EHRs) by healthcare providers. In a pluralistic healthcare system like that which exists in the United States, where many healthcare providers lack the incentive to adopt EHR and electronically share their patients’ records with competing providers, we believe that PHR platforms can facilitate the adoption and use of EHRs in the healthcare sector

Beauty Contest and Social Value of Fintech: An Economic Analysis

The past decade has witnessed a financial technology (Fintech) revolution. With the advent of Fintech in trading markets, many technology startups are using social media to gauge investors’ sentiment, as well as to detect events quickly, which in turn could impact stock prices and affect the efficiency of financial markets. Another example of Fintech that is enabled by the aggregation of opinions is social trading platforms. These platforms are financial counterparts of social networks where people can create an online profile and share information about investments and trading in financial instruments such as stocks and cryptocurrencies with other members of the platform. Online platforms like Sharewise and Estimize specialize in aggregating the opinions and predictions of all its users to come up with a target price for a stock, thus enabling the users to gain market insights from public opinion. This shift in trading has led to the emergence of a new class of investors who trade not only based on their own knowledge (or beliefs) about the market but also on that of the crowd’s opinion. Investors who follow public information about the fundamental price and their own private information are classified as first-order-beliefs traders while investors who use private information along with information gained from using such Fintech product are classified as higher-order-beliefs traders. The Fintech product captures the sentiment of other investors and experts by aggregating their opinions and predictions expressed on various social media platforms. Following the insight of Keynes (1936) on financial markets being akin to a beauty contest, where some people grade contestants based on who they think will be attractive to others, we model the market where a certain fraction of traders is employing the beauty-contest paradigm, using the services offered by Fintech firms, to form higher-order beliefs. We then establish the equilibrium in the market and examine its different properties. We also analyze how higher-order beliefs affect market efficiency and social welfare of investors. In the process, we answer the following research questions: is this shift beneficial for the market (in terms of efficiency) and the individual investors? And, if so, under what conditions and circumstances? Further, is there any limit to the number of Fintech investors (as a fraction of all investors) in the market so that social welfare is maximized? We find that higher-order beliefs tend to reduce market efficiency because public information is over-weighted. Increased precision of private information always enhances market efficiency; however, when public information is relatively noisy, increased precision of public information is detrimental to market efficiency. We also examine the effect of relative precision of public information to private information and fraction of Fintech investors in the market on ex-ante wealth of investors. Since accounting disclosure is a main source of public information, our results highlight that the use of Fintech in financial trading can dramatically affect the optimal level of accounting disclosure (i.e., transparency)

Identifying Research Trends in IS

The Information Systems (IS) discipline is a relatively young and rapidly evolving field of study, and its roots can be found within diverse disciplines. While these roots have been studied thoroughly and discussed at length, little is known about the emergent areas of research within the discipline. In this study, we map the IS discipline based on all publications in the top IS journals from 2005 through 2014. Our results provide a holistic view of the field and identify active and emergent areas of research

Identifying Research Trends in IS

The Information Systems (IS) discipline is a relatively young and rapidly evolving field of study, and its roots can be found within diverse disciplines. While these roots have been studied thoroughly and discussed at length, little is known about the emergent areas of research within the discipline. In this study, we map the IS discipline based on all publications in the top IS journals from 2005 through 2014. Our results provide a holistic view of the field and identify active and emergent areas of research

Adoption of Electronic and Personal Health Records: An Ecconomic Analysis

We investigate strategic issues surrounding the adoption of electronic health records (EHR) and personal health records (PHR) using an economic framework. Through our analysis, we find evidence that health care providers do not have an incentive to implement interoperable EHR systems even though the implementation of EHR systems (interoperable or otherwise) will increase consumer surplus. In this context, we conjecture that PHR platforms can fundamentally alter the incentives of health care providers, potentially leading to increased EHR adoption under some conditions. In a pluralistic health care system like that which exists in the United States, where health care providers have varying incentives to implement interoperable electronic health records, an online PHR platform can provide an alternative means for consumers to freely exchange their health records among different providers

THE VERTICAL INTEGRATION OF CONTENT AND BROADBAND SERVICES: THE NET NEUTRALITY DEBATE

Whether broadband service providers should be allowed to vertically integrate with content providers is a contentious issue, especially from the net neutrality perspective, since the vertically integrated firm can prioritize the delivery of its own content at the expense of that of its competitors if net neutrality is not enforced. We analyze the issues of vertical integration of content and broadband services surrounding this debate from an economic perspective, using a game-theoretic model. Our analysis establishes the various equilibria in the game, and shows that if net neutrality is not enforced, social welfare might – depending on parameter values – increase or decrease with vertical integration. Interestingly, we find that it is not always true that the ISP will always degrade the delivery of the competing content, and in fact will sometimes have the incentive to prioritize the latter over its own

Broadband User Discrimination and the Net Neutrality Debate

The net neutrality debate has brought out economic rationale for and against a variety of proposals of the broadband service providers to differentiate between different classes of users. Broadband users are characterized by the differing amounts of content they request online, as well as their valuation for such content. A broadband service provider (BSP) has two potential instruments for user discrimination – price discrimination and traffic prioritization (or degradation). We model six different pricing and prioritization options that cover many of the strategies that actual BSPs have adopted in the marketplace. By comparing these options, we find that imposing net neutrality increases the BSP's profit if the BSP price discriminates different consumer groups. If net neutrality is not imposed, however, the BSP might still prefer a net neutrality outcome depending on the various parameter values. These and other results will be useful both for the broadband service providers as they mull over the introduction of the different pricing strategies and for policymakers who are dealing with the net neutrality issue

Broadband User Discrimination and the Net Neutrality Debate

The net neutrality debate has brought out economic rationale for and against a variety of proposals of the broadband service providers to differentiate between different classes of users. Broadband users are characterized by the differing amounts of content they request online, as well as their valuation for such content. A broadband service provider (BSP) has two potential instruments for user discrimination – price discrimination and traffic prioritization (or degradation). We model six different pricing and prioritization options that cover many of the strategies that actual BSPs have adopted in the marketplace. By comparing these options, we find that imposing net neutrality increases the BSP's profit if the BSP price discriminates different consumer groups. If net neutrality is not imposed, however, the BSP might still prefer a net neutrality outcome depending on the various parameter values. These and other results will be useful both for the broadband service providers as they mull over the introduction of the different pricing strategies and for policymakers who are dealing with the net neutrality issue