Essays on Economics of Internet Personalization

The first essay of this doctoral dissertation empirically measures the business value of personalization using data consisting of 600,000 email advertisements with varying degrees of personalization sent to 35,000 customers over a nine month period. While we confirm that personalization based on customers past interests generates a positive response, we also report evidence that customers are concerned about privacy and respond negatively when the firm sends them advertisements with personalized greetings. We also use a finite mixture model to account for consumer specific heterogeneity in our data and identify segments of consumers with different response to personalization. The second essay uses a game-theoretic model to analyze the economics of personalization and information sharing in a duopoly where firms are asymmetric in the amount of information that they possess. We show that sharing consumer information leads to an increase in the firm profits but a decrease in consumer surplus. We also show that information sharing is possible even if each consumer controls her information and decides whether the firm should share it or not with other firms. Under different conditions, information ownership by consumers poses a credible threat and deters firms from sharing information or a non-credible threat, when consumers allow their information to be shared even if they are worse off after information sharing. Finally, the presence of privacy-conscious consumers leads to a redistribution of surplus from firms to consumers but can lead to a decrease in social welfare

Understanding IT-Enabled Social Features in Online Peer-to-Peer Businesses for Cultural Goods

Although the use of IT-enabled social features is gaining prominence on online peer-to-peer platforms, the use of these features is not well understood in the context of e-commerce marketplaces. In this study, we explain the effects of using IT-enabled social features for sellers by using data from Etsy.com, which is an online peer-to-peer marketplace for cultural goods that provides social features to its participants. Using the theory of fields of cultural production, we propose hypotheses regarding the direct and indirect impact of IT-enabled social features on sales. We find that sellers’ use of IT-enabled social features for community participation (e.g., following members) and content curation (e.g., sharing favorite items) is positively associated with their online status, which in turn is positively associated with their sales. However, sellers’ use of IT-enabled social features is directly negatively associated with sales. Overall, we find that the indirect positive association is large enough to offset the negative direct association. These results have important implications for sellers on online peer-to-peer platforms and for platform design

What Doctors Wish They Knew: Treatment Compliance in an Online Health Community for Chronic Patients

Treatment compliance for patients with chronic health problems is important for the management of their illness due to the long-term nature of their conditions. In this study, we examine how evaluations of different types of treatments provided by members of an online health community are associated with treatment evaluations and compliance. We use self-reported data on evaluation and compliance of over 270 different treatments from over 20,000 patients in a prominent online health community. We find that other community members’ treatment evaluation valence is positively associated with patient treatment evaluation and treatment compliance. Similarly, other community members’ treatment compliance is positively associated with patient treatment compliance. We also find these relations are moderated by community size and ratings variance. We discuss the theoretical implications of these results for the online health communities’ literature, as well as the practical implications for patients, healthcare providers, and policy makers

Do Security Vulnerability Announcemnets Impact Software Vendors - An Event Study Analysis

In this paper, we use the event study methodology to examine the role that financial markets play in determining the impact of vulnerability disclosures on software vendors. We collect data from leading national newspapers and industry sources by searching for reports on published software vulnerabilities. Our main result is that vulnerability disclosures do lead to a negative and significant change in market value for a software vendor. On average, a vendor loses around 0.6% value in stock price when a vulnerability is reported. To provide further insight, we use the information content of the disclosure announcement to classify vulnerabilities into various types. This is the first study to measure vendors’ incentive to develop secure software and also provides many interesting implications for software vendors as well as policy makers

Ride-sharing apps really reduce drunk driving fatalities

Uber X led to a 3.6%–5.6% decrease in the rate of motor vehicle homicides per quarter in California, write Sunil Wattal and Brad N. Greenwoo

IS IT THE GREAT EQUALIZER? A SOCIAL CLASS BASED LONGITUDINAL ANALYSIS OF TECHNOLOGY DIFFUSION

Technology in general and the Internet in particular have often been seen as the ―great equalizer‖ in that it provides a level playing field for all individuals in the society in terms of competing for social and economic opportunities. However, technology philosophers such as Andrew Feenberg have argued that technology diffusion mirrors the existing social order. Which of these worldviews actually holds is an open question, and in this research, we try to answer it using data on adoption of multiple technologies by individuals in the US over different time periods. Our results suggest that technology diffusion largely takes place along existing social class lines, and that the arrival of newer technologies ensures that the digital divide perpetuates

An Empirical Examination of Users’ Information Hiding in a Crowdfunding Context

Online privacy remains an ongoing source of debate in society. Sensitive to this, many web platforms are offering users greater, more granular control over how and when their information is revealed. However, recent research suggests that information control mechanisms of this sort are not necessarily of economic benefit to the parties involved. We examine these mechanisms and their economic consequences, leveraging data from one of the world\u27s largest global crowdfunding platforms, where contributors can conceal their identity or contribution amounts from public display. We find that information hiding is more likely when contributors are under greater scrutiny or exhibiting “undesirable” behavior. We also identify an anchoring effect from prior contributions, which is eliminated when earlier contributors conceal their amounts. Subsequent analyses indicate that a nuanced approach to the design and provision of information control mechanisms, such as varying default settings based on contribution amounts, can help promote larger contributions

Signaling Mechanisms and Survival of Service Providers in an Electronic Market

This research studies the survival of software implementation service providers in an electronic market (or e-market), and the role that vendor characteristics such as reputation, education, experience, ‘preferred provider’ status, and references play in predicting which service providers will exit the e-market after it (the e-market) implements trust enhancing mechanisms. Using theories from asymmetric information, signaling, and trust literatures, we propose a model to examine the relation between firm characteristics and survival. Our empirical results support the key role played by these signals in inducing the separating equilibrium that leads to the shakeout among software service providers in an e-market