nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2005‒11‒19
seven papers chosen by
Walter Frisch
University Vienna

  1. Internet Advertising and the Generalized Second Price Auction: Selling Billions of Dollars Worth of Keywords By Benjamin Edelman; Michael Ostrovsky; Michael Schwarz
  2. Multi-core CPUs, Clusters and Grid Computing: a Tutorial By William L. Goffe; Michael Creel
  3. Information Visualization Of An Agent-Based Financial System Model By Wei Jiang; Richard Webber & Ric D Herbert
  4. Electronic Filing, Tax Preparers, and Participation in the Earned Income Tax Credit By Wojciech Kopczuk; Cristian Pop-Eleches
  5. How Does Information Technology Really Affect Productivity? Plant-Level Comparisons of Product Innovation, Process Improvement and Worker Skills By Ann P. Bartel; Casey Ichniowski; Kathryn L. Shaw
  6. Hypermarket Competition and the Diffusion of Retail Checkout Barcode Scanning By Jonathan Beck; Michal Grajek; Christian Wey
  7. Financial Computational Intelligence By Chiu-Che Tseng; Yu-Chieh Lin

  1. By: Benjamin Edelman; Michael Ostrovsky; Michael Schwarz
    Abstract: We investigate the "generalized second price" auction (GSP), a new mechanism which is used by search engines to sell online advertising that most Internet users encounter daily. GSP is tailored to its unique environment, and neither the mechanism nor the environment have previously been studied in the mechanism design literature. Although GSP looks similar to the Vickrey-Clarke-Groves (VCG) mechanism, its properties are very different. In particular, unlike the VCG mechanism, GSP generally does not have an equilibrium in dominant strategies, and truth-telling is not an equilibrium of GSP. To analyze the properties of GSP in a dynamic environment, we describe the generalized English auction that corresponds to the GSP and show that it has a unique equilibrium. This is an ex post equilibrium that results in the same payoffs to all players as the dominant strategy equilibrium of VCG.
    JEL: L0
    Date: 2005–11
  2. By: William L. Goffe; Michael Creel
    Abstract: The nature of computing is changing and it poses both challenges and opportunities for economists. Instead of increasing clock speed, future microprocessors will have "multi-cores" with separate execution units. "Threads" or other multi-processing techniques that are rarely used today are required to take full advantage of them. Beyond one machine, it has become easy to harness multiple computers to work in clusters. Besides dedicated clusters, they can be made up of unused lab computers or even your colleagues' machines. We will give live demos of multi-core and clusters and will describe grid computing (multiple clusters that could span the Internet). OpenMP (open multi-processing) and MPI (message passing interface) are among the topics described and shown live
    Keywords: parallel computing, clusters, grid computing
    JEL: C63
    Date: 2005–11–11
  3. By: Wei Jiang (Faculty of Science and I.T. University of Newcastle, Australia); Richard Webber & Ric D Herbert
    Abstract: This paper considers the application of information visualization techniques to an agent-based model of a financial system. The minority game is a simple agent-based model which can be used to simulate the events in a real-world financial market. To aid understanding of this model, we can apply information visualization techniques. Treemap and sunburst are two such information visualization techniques, which previous research tells us can effectively represent information similar to that generated by the minority game. Another information visualization technique, called logical fisheye-lens, can be used to augment treemap and sunburst, allowing users to magnify areas of interest in these visualizations. In this paper, treemap and sunburst, both with and without fisheye-lens, are applied to the minority game, and their effectiveness is evaluated. This evaluation is carried out through an analysis of users performing various tasks on (simulated) financial market data using the visualization techniques. A subjective questionnaire is also used to measure the users’ impressions of the visualization techniques.
    Keywords: Dynamic Models, Minority Game, Visualization
    JEL: C63 C73
    Date: 2005–11–11
  4. By: Wojciech Kopczuk; Cristian Pop-Eleches
    Abstract: In 2002 more than 18 million low-income individual taxpayers received the Earned Income Tax Credit (EITC). Despite its size, non-participation in this program is a concern and substantial effort is devoted by the IRS, local governments and many non-profits to address it. Most of the tax returns for EITC recipients are filed electronically by paid tax preparers who often charge significant fees for their services. Using variation across states in the introduction of state electronic filing programs, we show that the introduction of electronic filing had a significant effect on participation in the EITC. Our results are robust to accounting for other welfare, EITC and IRS reforms introduced during the same period. We suggest that this effect is due to the impact that electronic filing opportunities had on the tax preparation industry, therefore providing an example of how a market-based approach can be effective in addressing the problem of program non-participation.
    JEL: H24 I38
    Date: 2005–11
  5. By: Ann P. Bartel; Casey Ichniowski; Kathryn L. Shaw
    Abstract: This study presents new empirical evidence on the relationship between investments in new computer-based information technology (IT) and productivity by investigating several plant-level mechanisms through which IT could promote productivity growth. We have assembled a data set on plants with a common production technology in a narrowly defined industry - valve manufacturing - to study the effects of new IT on product innovation, production process improvements, employee skills and work practices. The homogeneity of the plants' production processes within this narrowly defined industry together with the estimation of longitudinal models eliminate many sources of unmeasured heterogeneity that could confound productivity comparisons in more aggregate data and in broader samples. The three main results of this study highlight how the adoption of new IT-enhanced machinery involves much more than just the installation of new equipment on the factory floor. We find that adoption of new IT-enhanced equipment (1)alters business strategies, moving valve manufacturers away from commodity production based on long production runs to customized production in smaller batches; (2)improves the efficiency of all stages of the production process with reductions in setup times supporting the change in business strategy and (3)increases the skill requirements of workers while promoting the adoption of new human resource practices.
    JEL: O33 J24 L25
    Date: 2005–11
  6. By: Jonathan Beck; Michal Grajek; Christian Wey
    Abstract: This paper presents a set of panel data to study the diffusion of retail checkout barcode scanning in ten European countries over the period 1981-1996. Estimates from a standard diffusion model suggest that countries differ most in the long-run diffusion level of barcode scanning and less in timing or diffusion speed. We present evidence that the emergence of hypermarkets raises competitive intensity and use hypermarket data, among other variables, in a pooled estimation. Results suggest that hypermarket competition reduces longrun adoption of information technology (IT) in retailing. In particular, the emergence of hypermarkets seems to deepen retail segmentation by inducing potential adopters (e.g. supermarkets) to exit the market and/or by discouraging adoption by other retail formats. Consistent with expectations, scale and income effects spur IT diffusion and there is a classic substitution effect: when wages rise, diffusion of a labor-saving technology such as barcode scanning is more intense. We do not find a significant impact of employment protection legislation. <br> <br> <i>ZUSAMMENFASSUNG - (Wettbewerb durch Hypermärkte und die Diffusion von Scannerkassen im Einzelhandel) <br> In diesem Papier stellen wir einen Datensatz zur Diffusion des Barcode- Scannens im Einzelhandel in zehn europäischen Ländern zwischen 1981 und 1996 vor. Schätzergebnisse auf Basis eines bewährten Diffusionsmodells ergeben, dass diese Länder sich hauptsächlich im langfristigen Verbreitungsniveau des Barcode-Scannens unterscheiden, und weniger in Diffusionsbeginn und -geschwindigkeit. Wir präsentieren Evidenz dafür, dass die Verbreitung von Hypermärkten die Wettbewerbsintensität im Einzelhandel erhöht und verwenden Daten zu Hypermärkten, zusammen mit anderen Variablen, in einer gemeinsamen Schätzung. Die Ergebnisse legen nahe, dass Wettbewerb durch Hypermärkte sich langfristig negativ auf die Diffusion von Informationstechnologie (IT) im Einzelhandel auswirkt. Insbesondere scheint die Verbreitung von Hypermärkten die Segmentierung im Einzelhandel zu vertiefen, indem sie potentielle Nutzer von IT (z.B. Supermärkte) zum Marktaustritt verleitet und/oder andere Einzelhändler von der Nutzung abschreckt. Wie erwartet stärken Skalen- und Einkommenseffekte die Diffusion von IT, und es gibt einen klassischen Substitutionseffekt: bei steigenden Löhnen ist die Diffusion einer arbeitssparenden Technologie wie dem Barcode-Scannen intensiver. Gesetzgebung zum Kündigungsschutz scheint keine signifikanten Auswirkungen auf IT-Diffusion zu haben.</i>
    Keywords: IT diffusion, retail competition, hypermarkets
    JEL: L5 L81 O33
    Date: 2005–11
  7. By: Chiu-Che Tseng; Yu-Chieh Lin
    Abstract: Artificial intelligence decision support system is always a popular topic in providing the human with an optimized decision recommendation when operating under uncertainty in complex environments. The particular focus of our discussion is to compare different methods of artificial intelligence decision support systems in the investment domain – the goal of investment decision-making is to select an optimal portfolio that satisfies the investor’s objective, or, in other words, to maximize the investment returns under the constraints given by investors. In this study we apply several artificial intelligence systems like Influence Diagram (a special type of Bayesian network), Decision Tree and Neural Network to get experimental comparison analysis to help users to intelligently select the best portfoli
    Keywords: Artificial intelligence, neural network, decision tree, bayesian network
    JEL: C45
    Date: 2005–11–11

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