nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2008‒08‒06
two papers chosen by
Walter Frisch
University Vienna

  1. Organizational Redesign, Information Technologies and Workplace Productivity By Dostie, Benoit; Jayaraman, Rajshri
  2. Coping with Costly Bid Evaluation in Online Reverse Auctions for IT Services By Radkevitch, U.L.; Heck, H.W.G.M van; Koppius, O.R.

  1. By: Dostie, Benoit (HEC Montreal); Jayaraman, Rajshri (European School of Management and Technology (ESMT))
    Abstract: Using a large longitudinal, nationally representative workplace-level dataset, we explore the productivity gains associated with computer use and organizational redesign. The empirical strategy involves the estimation of a production function, augmented to account for technology use and organizational design, correcting for unobserved heterogeneity. We find large returns associated with computer use. We also find that computer use and organizational redesign may be complements or substitutes in production, and that the productivity gains associated with organizational redesign are industry-specific.
    Keywords: linked employer-employee data, workplace practices, productivity, information technologies
    JEL: D20 L20 M54 O33
    Date: 2008–07
  2. By: Radkevitch, U.L.; Heck, H.W.G.M van; Koppius, O.R. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Online markets have dramatically decreased costs of search and communication for buyers. By contrast, costs of evaluating purchasing alternatives have become critical due to an overwhelming range of available options. When high, evaluation costs can offset potential gains from transactions and cause inefficiencies, e.g. by forcing buyers to abandon transactions without allocating contracts. While most previous studies treat evaluation costs as an exoge-nous factor, this study considers them endogenous. We identify several tactics (search, request for proposal preparation, budget announcement, bid filtering, and negotiation) that buyers at online markets can use to reduce their evaluation costs and hence influence project allocation. Using data from nearly 10 thousand transactions at a leading online marketplace for IT services, we show that buyers who use these tactics are more likely to allocate their project to a winner than buyers not using these tactics. Buyer experience also has a positive effect on allocation and, in addition, moderates the effectiveness of some of the tactics. As experience grows, budget announcement be-comes more effective in coping with evaluation costs and increases the likelihood of allocation, while the effectiveness of request for proposal preparation decreases. Together, these results shed more light on the buyer side of online reverse auctions, which leads to guidelines for improving the efficiency of online marketplaces.
    Keywords: evaluation costs;reverse auctions;online markets;IT services;outsourcing;buyer behavior;vendor selection
    Date: 2008–07–15

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