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

Security, Fraudulent transactions and Customer Loyalty: A Field Study

Security and Privacy has become a dominant issue for both consumers and corporations. In this paper, we investigate how customer behavior is affected after they have been a victim of financial fraud. Our analysis provides insights into how security concerns affect the continuation of the existing relationship of the customers depending on kind of fraudulent transactions. With the data from one of the largest banks in the US, we show that the probability of ending the relationship in the next six months increases significantly after a fraudulent transaction. We provide results with a detailed analysis including the kind of fraudulent transaction, tenure and location

Role of Online Social Networks in Job Search by Unemployed Individuals

The recent growth of online social networks has enabled job seekers to stay connected with all of their acquaintances. Thus the number of online connections – weak or strong – that an individual is able to manage has increased significantly. In this paper, we first examine if an individual’s online social network plays a role in driving her job search behavior. Secondly, we examine how the ties (weak and strong) and search intensity affect the job outcomes (job leads, interviews and offers) received from online social networks vs. those from other job search modes like career fairs & agencies, newspapers & magazines, internet, and close friends and family (offline). Using a survey data of 109 unemployed job seekers, we find that weak ties are especially helpful in generating job leads but it is the strong ties that play an important role in generating job interviews and job offers

An Empirical Analysis of Cellular Voice and Data services

Cellular telephony and associated data services has been a major social phenomena for well over a decade now. It has changed the way - in some countries more than others - in which people communicate. In many countries in Northern Europe and Asia, its penetration rates are very high and in others less so but in all cases it has engendered change at multiple levels - socially as noted and in terms of market structure and competition with the established Incumbent Local Exchange and Inter Exchange service providers. However, there has been little work published in the academic literature on user consumption of cellular voice and data services. This has been due to the unavailability of longitudinal data at the individual user level on their consumption of voice and data services. We have such data from a large cellular service provider in Asia. Demand for voice and data services is influenced by the tariffs or 'service plans' offered by firms. In our analysis we empirically estimate the drivers for cellular services how demographic and plan characteristics affect the user choices. We first provide a theoretical model and then provide insight into consumption patterns over a one year period of cellular voice and data services and relate it to service plan design

Internet Exchanges for Used Books: An Empirical Analysis of Product Cannibalization and Welfare Impact

Information systems and the Internet have facilitated the creation of used-product markets that feature a dramatically wider selection, lower search costs, and lower prices than their brick-and-mortar counterparts do. The increased viability of these used-product markets has caused concern among content creators and distributors, notably the Association of American Publishers and Author’s Guild, who believe that used-product markets will significantly cannibalize new product sales. This proposition, while theoretically possible, is based on speculation as opposed to empirical evidence. In this paper, we empirically analyze the degree to which used products cannibalize new-product sales for books—one of the most prominent used-product categories sold online. To do this, we use a unique data set collected from Amazon.com’s new and used book marketplaces to measure the degree to which used products cannibalize new-product sales. We then use these estimates to measure the resulting first-order changes in publisher welfare and consumer surplus. Our analysis suggests that used books are poor substitutes for new books for most of Amazon’s customers. The cross-price elasticity of new-book demand with respect to used-book prices is only 0.088. As a result, only 16% of used-book sales at Amazon cannibalize new-book purchases. The remaining 84% of used-book sales apparently would not have occurred at Amazon’s new-book prices. Further, our estimates suggest that this increase in book readership from Amazon’s used-book marketplace increases consumer surplus by approximately $67.21 million annually. This increase in consumer surplus, together with an estimated$45.05 million loss in publisher welfare and a $65.76 million increase in Amazon’s profits, leads to an increase in total welfare to society of approximately$87.92 million annually from the introduction of used-book markets at Amazon.com.NYU, Stern School of Business, IOMS Department, Center for Digital Economy Researc

Effect of Electronic Secondary Markets on the Supply Chain

We present a model to investigate the competitive implications of electronic secondary markets that promote concurrent selling of new and used goods on a supply chain. In secondary markets where suppliers cannot directly utilize used goods for practicing intertemporal price discrimination and where transaction costs of resales is negligible, the threat of cannibalization of new goods by used goods become significant. We examine conditions under which it is optimal for suppliers to operate in such markets, explaining why these markets may not always be detrimental for them. Intuitively, secondary markets provide an active outlet for some highvaluation consumers to sell their used goods. The potential for such resales lead to an 05 ghose.pmd 91 8/26/2005, 1:10 PM 92 GHOSE, TELANG, AND KRISHNAN increase in consumersâ valuation for a new good, leading them to buy an additional new good. Given sufficient heterogeneity in consumerâ s affinity across multiple suppliersâ products, the â market expansion effectâ accruing from consumersâ cross-product purchase affinity can mitigate the losses incurred by suppliers from the direct â cannibalization effect.â We also highlight the strategic role that used goods commission set by the retailer plays in determining profits for suppliers. We conclude the paper by empirically testing some implications of our model using a unique data set from the online book industry, which has a flourishing secondary market.NYU, Stern School of Business, IOMS Department, Center for Digital Economy Researc