The Effect of Electronic Commerce on Geographic Trade and Price Variance in a Business-to-Business Market

Imbalances in supply and demand often cause the price for the same good to vary across geographic locations. Economic theory suggests that if the price differential is greater than the cost of transporting the good between locations, then buyers will shift demand from high-price locations to lowprice locations, while sellers will shift supply from low-price locations to high-price locations. This should make prices more uniform and cause the overall market to adhere more closely to the “law of one price.” However, this assumes that traders have the information necessary to shift their supply/demand in an optimal way. We investigate this using data on over 2 million transactions in the wholesale used vehicle market from 2003 to 2008. This market has traditionally consisted of a set of non-integrated regional markets centered on market facilities located throughout the United States. Supply / demand imbalances and frictions associated with trading across distance created significant geographic price variance for generally equivalent vehicles. During our sample period, the percentage of transactions conducted electronically in this market rose from approximately 0% to approximately 20%. We argue that the electronic channel reduces buyers’ information search costs and show that buyers are more sensitive to price and less sensitive to distance when purchasing via the electronic channel than via the traditional physical channel. This causes buyers to be more likely to shift demand away from a nearby facility where prices are high to a more remote facility where prices are low. We show that these “cross-facility” demand shifts have led to a 25% reduction in geographic price variance during the time frame of our sample. We also show that sellers are reacting to these market shifts by becoming less strategic about vehicle distribution, given that vehicles are increasingly likely to fetch a similar price regardless of where they are sold

DOES ELECTRONIC TRADING IMPROVE MARKET EFFICIENCY? EVIDENCE FROM SPATIAL ARBITRAGE IN THE AUTOMOTIVE MARKET

Price disparities across locations can occur when sellers in one location have difficulty matching with buyers in a different location due to the transaction costs of trading across distance. Spatial arbitrageurs exploit these discrepancies by buying goods from locations where prices are low and reselling them at locations where prices are high. Electronic channels should lower the transaction costs of trading across distance, thereby facilitating buyer/seller matching. It follows that electronic trading should reduce spatial arbitrage opportunities, thereby improving market efficiency. We test this hypothesis in the automotive market. The distinguishing feature of our data is that we can identify the distinct buyers, sellers, and vehicles involved in transactions, giving us a detailed look at transaction patterns likely motivated by spatial arbitrage. We conclude that traders are engaging in spatial arbitrage within the market but that spatial arbitrage has become less prevalent over time due to increased electronic trading

How Does Algorithmic Trading Influence Investor Participation in Peer-to-Peer Online Lending Markets?

Algorithmic trading has reshaped equity markets and had significant effects on market performance. We examine the effect of algorithmic trading in online peer-to-peer lending markets. These markets were originally designed to be accessible to individual investors, however, because algorithmic trading is typically used by institutional investors with substantial resources, algorithmic trading threatens to shut individual investors out of the market. Ironically, this could exacerbate inequalities in the financial system that peer-to-peer lending markets were designed to help eliminate. To study the effects of algorithmic trading, we examine an API upgrade on Prosper.com that facilitated algorithmic trading. Using a difference-in-differences strategy, we find that individual “manual” investors were crowded out of the most quickly-funded and typically best-performing loans after the API upgrade. However, the API upgrade may have increased the size of the market, thereby allowing individual investors to continue investing in the market, albeit for somewhat lower quality loans

The Market is Flat (or is it?) The Effect of Electronic Trading on Buyer Reach, Geographic Transaction Activity and Geographic Price Variance

We analyze how increased use of electronic channels affects geographic price variance by enabling buyers to shift demand across locations. Using data from the wholesale automotive market, we find that buyers use the reach of the electronic channels to shift purchases from highprice to low-price locations. This “arbitrage” reduces the variance of market prices, but not their means. Further, these relationships weaken with distance, due to transportation costs. The study contributes to the literature on how electronic trading affects geographic trade and price dispersion by: a) considering the role of geographic location in price dispersion, b) observing the behavioral mechanism (buyer arbitrage across locations) that leads to lower price dispersion, c) analyzing dispersion when prices are determined by auction rather than fixed price, and d) examining how reduced buyer search costs have led to lower price dispersion throughout the entire market, as opposed to only the online or offline components

Time Changes Everything: An Examination and Application of Time-Varying Coefficients in Information Systems Research

The Information Systems research field is inherently dynamic. New technologies, new standards, new legislation, and changing user expectations are some of the reasons why topics of interest to the IS field remain in flux. As researchers, we seek to uncover and explain relationships among variables, but due to the dynamism of IS phenomena, these relationships are apt to change over time. For example, the effect of informational features such as product diagnosticity or seller reputation on the price of an electronic commerce transaction is likely to change over time as users become more comfortable with online trading. This paper describes several statistical methods to model these changes in relationships. Specifically, we discuss methods to investigate time-varying coefficients in regression models, including rolling regression, “parameterizing” the coefficients using process functions, and testing for structural change. Importantly, we describe how the structure of many of the data sets used in IS research differs from that of data sets often used in other fields such as finance, economics, or marketing. This has implications for the investigation of time-based effects. We illustrate each method using a data set gathered from the wholesale automotive market, which not only helps us explain the methods, but also allows us to investigate the evolution of market practice in one empirical context. Thus, we address both methodological and substantive issues. Given that our field is inherently dynamic, an understanding of how effects change over time should be central to the overall IS research agenda. This paper is designed to familiarize IS researchers with methods available for this purpose

DOES INFORMATION TECHNOLOGY INCREASE OR DECREASE HOSPITALS’ RISK? AN EMPIRICAL EXAMINATION OF COMPUTERIZED PHYSICIAN ORDER ENTRY AND MALPRACTICE CLAIMS

Information technology (IT) has significant potential to improve the quality of patient care, to lower costs, and to improve efficiency. However, IT leaves an electronic paper trail that may demonstrate negligence and thereby create legal risk. Emerging research suggests that this fear of electronic discovery is delaying IT adoption, thereby perpetuating inefficiencies. Is this fear founded? If it is, then policy changes are needed to remove this obstacle to streamlining the healthcare system. If not, then healthcare providers should move ahead to realize IT benefits without being stymied by irrational fears. We examined the relationship between Computerized Physician Order Entry (CPOE) and malpractice claims against hospitals in Florida between 1999 and 2006. CPOE reduces the number, severity, and disposition time of claims, while having no effect on the amounts paid. This indicates that CPOE reduces hospital legal risk, suggesting that fears of increased legal risk due to IT are unfounded

The Effect of Electronic Commerce on Geographic Trade and Price Variance in a Business-to-Business Market

Imbalances in supply and demand often cause the price for the same good to vary across geographic locations. Economic theory suggests that if the price differential is greater than the cost of transporting the good between locations, then buyers will shift demand from high-price locations to lowprice locations, while sellers will shift supply from low-price locations to high-price locations. This should make prices more uniform and cause the overall market to adhere more closely to the “law of one price.” However, this assumes that traders have the information necessary to shift their supply/demand in an optimal way. We investigate this using data on over 2 million transactions in the wholesale used vehicle market from 2003 to 2008. This market has traditionally consisted of a set of non-integrated regional markets centered on market facilities located throughout the United States. Supply / demand imbalances and frictions associated with trading across distance created significant geographic price variance for generally equivalent vehicles. During our sample period, the percentage of transactions conducted electronically in this market rose from approximately 0% to approximately 20%. We argue that the electronic channel reduces buyers’ information search costs and show that buyers are more sensitive to price and less sensitive to distance when purchasing via the electronic channel than via the traditional physical channel. This causes buyers to be more likely to shift demand away from a nearby facility where prices are high to a more remote facility where prices are low. We show that these “cross-facility” demand shifts have led to a 25% reduction in geographic price variance during the time frame of our sample. We also show that sellers are reacting to these market shifts by becoming less strategic about vehicle distribution, given that vehicles are increasingly likely to fetch a similar price regardless of where they are sold

A research agenda to support the development and implementation of genomics-based clinical informatics tools and resources.

OBJECTIVE: The Genomic Medicine Working Group of the National Advisory Council for Human Genome Research virtually hosted its 13th genomic medicine meeting titled Developing a Clinical Genomic Informatics Research Agenda . The meeting\u27s goal was to articulate a research strategy to develop Genomics-based Clinical Informatics Tools and Resources (GCIT) to improve the detection, treatment, and reporting of genetic disorders in clinical settings. MATERIALS AND METHODS: Experts from government agencies, the private sector, and academia in genomic medicine and clinical informatics were invited to address the meeting\u27s goals. Invitees were also asked to complete a survey to assess important considerations needed to develop a genomic-based clinical informatics research strategy. RESULTS: Outcomes from the meeting included identifying short-term research needs, such as designing and implementing standards-based interfaces between laboratory information systems and electronic health records, as well as long-term projects, such as identifying and addressing barriers related to the establishment and implementation of genomic data exchange systems that, in turn, the research community could help address. DISCUSSION: Discussions centered on identifying gaps and barriers that impede the use of GCIT in genomic medicine. Emergent themes from the meeting included developing an implementation science framework, defining a value proposition for all stakeholders, fostering engagement with patients and partners to develop applications under patient control, promoting the use of relevant clinical workflows in research, and lowering related barriers to regulatory processes. Another key theme was recognizing pervasive biases in data and information systems, algorithms, access, value, and knowledge repositories and identifying ways to resolve them

Inverting the model of genomics data sharing with the NHGRI Genomic Data Science Analysis, Visualization, and Informatics Lab-space

The NHGRI Genomic Data Science Analysis, Visualization, and Informatics Lab-space (AnVIL; https://anvilproject.org) was developed to address a widespread community need for a unified computing environment for genomics data storage, management, and analysis. In this perspective, we present AnVIL, describe its ecosystem and interoperability with other platforms, and highlight how this platform and associated initiatives contribute to improved genomic data sharing efforts. The AnVIL is a federated cloud platform designed to manage and store genomics and related data, enable population-scale analysis, and facilitate collaboration through the sharing of data, code, and analysis results. By inverting the traditional model of data sharing, the AnVIL eliminates the need for data movement while also adding security measures for active threat detection and monitoring and provides scalable, shared computing resources for any researcher. We describe the core data management and analysis components of the AnVIL, which currently consists of Terra, Gen3, Galaxy, RStudio/Bioconductor, Dockstore, and Jupyter, and describe several flagship genomics datasets available within the AnVIL. We continue to extend and innovate the AnVIL ecosystem by implementing new capabilities, including mechanisms for interoperability and responsible data sharing, while streamlining access management. The AnVIL opens many new opportunities for analysis, collaboration, and data sharing that are needed to drive research and to make discoveries through the joint analysis of hundreds of thousands to millions of genomes along with associated clinical and molecular data types

Do Political Differences Decrease Market Efficiency? An Investigation in the Context of Online Lending

Over the last several years, the United States has become increasingly polarized politically. We study whether political differences inhibit market efficiency by examining whether investors in online lending markets are less likely to lend to borrowers w