A Model of Competition Between Online and Traditional Firms

This paper attempts to model the strategic interaction between firms in online and traditional markets. It analyzes how each market affects the competitive characteristics of the other. Existing research on electronic markets has focused largely on their welfareenhancing features. However, electronic markets coexist with traditional markets with each strongly influencing the other. Results show that the profits of firms in competing channels increase as they differentiate themselves as much as possible from each other, and by differentiating themselves based on the characteristics over which consumers have the maximum variety in relative valuations. The choice of the factors of differentiation, however, is crucial, as are the relative sizes of the online and offline markets. The results also indicate that neglecting the impact of traditional markets on online firms risks oversimplification, and might lead to incorrect prescriptions to both offline and online firms

Dotcoms vs. Notcoms: The Impact of Internet Commerce on Traditional Firms

The confluence of several factors over the last few years has transformed the Internet from an experimenting ground for technophiles and hobbyists into an important and sophisticated forum for commerce. The Web promises to be not only an effective channel for information dissemination, but also for customer acquisition and retention, relationship management, oneon- one interaction, differentiation, cost reduction, competitive positioning and other such activities that are revolutionizing commerce. Unlike traditional distribution channels, the Web possesses several unique features that not only enable the seamless unbundling of the various functions that distribution channels perform, but also helps to realign these functions and increase efficiency by altering the existing economies of scale and scope. Further, the Web provides a whole new opportunity to rethink the way businesses are conducted and holds the potential for radical changes in the way of new products and services. Despite the growing importance of online commerce, most of what is known about the Web as a channel for commerce is based on anecdotes and exploratory studies. There is no formal understanding of how it would affect the structure and performance of markets, and the rapid pace of technological change makes it difficult to predict any long-term effects. Besides, it is not clear if the Web promises to be an efficient channel for commerce for all categories of products, firms and industries and if it should be used differently from other direct sales and distribution channels. My thesis seeks to address some of these issues

Emergent Structures in the Information Economy

Electronic commerce is growing at a rapid, even bewildering pace. As we have no past experience from which to imagine commercial possibilities, it is hard to discern any constants except for that of continual change. In this research, we suggest that it may be possible to understand the directions of e-commerce by reasoning from the underlying functions that must be provided

Recommendation Systems: Decision Support for the Information Economy

Information Systems Working Papers Serie

The Impact of Intelligent Agents on Electronic Markets: Customization, Preference Revelation and Pricing.

Apart from reducing buyer search costs, web-based commerce has also enabled the use of intelligent agent technologies that reduce seller search costs by targeting buyers, customizing, and pricing products in real-time. Our model of an electronic market with customizable products analyzes the pricing, profitability and welfare implications of these agent-based technologies that price dynamically, based on product preference and demographic information revealed by consumers. We find that in making the trade-off between better prices and better customization, consumers invariably choose less-than-ideal products. Furthermore, this trade-off impacts buyers on the higher end of the market more, and causes a transfer of consumer surplus towards buyers with a lower willingness to pay. As buyers adjust their product choices in response to better demand agent technologies, sellers may experience reduced revenues, since the gains from better buyer information are countered by the lowering of the total value created from the transactions. We study the strategic and welfare implications of these findings, and discuss managerial and technology development guidelines.Information Systems Working Papers Serie

Resource aware load distribution strategies for scheduling divisible loads on large-scale data intensive computational grid systems

Ph.DDOCTOR OF PHILOSOPH

Surging Volatility: An Internet Effect?

This paper analyzes the impact of firmsí adoption of online retailing on their stock price volatility. Given the nascency of the Web, firms moving online are faced with an increased uncertainty in their product markets in addition to fixed setup costs. A simple model illustrates how increased uncertainty in the product markets increases the volatility of the firmís profits and its stock price. Results consistent with the model are confirmed by an empirical analysis of the volatility of stock prices of traditional firms adopting online-retailing. Both the traditional event study methodology as well as the structural break analysis reveal a distinct surge in volatility of firmsí stock prices around the date of announcement of their online-retailing operations, an effect that is absent in a matched sample of traditional firms. More interestingly, the volatility-surge is absent for the sample of firms that moved online prior to June 1998. Ongoing research examines possible drivers and the implications of these phenomena for investors, firms, and regulatory authorities

Quality Uncertainty And Adverse Selection In Online Sponsored-Search Markets

Sponsored-search mechanisms, where advertisers bid for better placement in the listing of search results on Yahoo! and Google, have emerged as the dominant revenue model for online search engines. Interestingly, Yahoo! and Google employ different mechanisms to determine the placement of bidders’ advertisements. This provides an unprecedented opportunity to extend the research relating quality and advertising in traditional markets to the online setting, and also examine whether intervention by the search intermediary impacts the outcomes observed in these markets. Using data from online sponsored-search auctions, we examine the relationship between advertisers’ quality and their advertising-intensity, indicated by their willingness to pay for search listings. We assess how this relationship differs across search, experience, and credence products characterized by differing degrees of quality uncertainty as well as across the two markets. We find significant differences in the quality-advertising relationships across the three product categories as well as across the two market mechanisms. We discuss the implications of our findings for consumers as well as intermediaries, and provide directions for future research in this emerging context

America Online Inc.: The Portal Era

Information Systems Working Papers Serie