nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2008‒11‒04
five papers chosen by
Walter Frisch
University Vienna

  1. The Economics of Net Neutrality Revisited By Gernot Pehnelt
  2. Conceptualizing and illustrating the digital lifestyle of youth By Pedro Quelhas Brito
  3. Blogs and the Economics of Reciprocal Attention By Gaudeul, Alexia; Mathieu, Laurence; Peroni, Chiara
  4. Does Resorting to Online Dispute Resolution Promote Agreements? Experimental Evidence By Yannick Gabuthy; Nicolas Jacquemet; Nadège Marchand
  5. Market Entry in E-Commerce By Maximilian Kasy; Michael Kummer

  1. By: Gernot Pehnelt (Director of GlobEcon, Research Associate at ECIPE and Research Partner at the Chair of Economic Policy, Friedrich-Schiller-University Jena)
    Abstract: In this paper, we analyze the problem of congestion and quality loss of data transmission through the Internet from an economic perspective. We show that due to the congestion problem, quality sensitive services are likely to be crowded out by high volume but less quality sensitive applications in a strict "neutral" system. This crowding out reduces the availability of services and the development and diffusion of innovative and high value services. Not least, the congestion problem causes welfare loss. As we discuss in this paper, the differentiation of data packets according to their quality sensitivity could remedy the congestion problem. Appropriate business models that incorporate quality of service concepts could be very efficient in preventing the crowding out of high value quality sensitive services without affecting other applications and would be very convenient for Internet users at the same time. We show that any ex ante regulation in the sense of strict Net neutrality could seriously harm the development of innovative business models and discourage innovation and investment.
    Keywords: Net neutrality, Internet, bandwidth, quality sensitivity, crowding-out
    JEL: O31 O32 O33 O38 L51
    Date: 2008–10–27
  2. By: Pedro Quelhas Brito (LIAAD/INESC-Porto, Faculdade de Economia, Universidade do Porto)
    Abstract: This research looks at the psychosocial content and nature of the concept of the digital lifestyle when applied to pre-teens and teenagers. The concept of lifestyle is analyzed to assess whether the digital technological context is an acceptable framework to characterize the daily life of pre-teens and teenagers. Five dimensions of the digital lifestyle concept were useful to structure more than 200 technologically aware young consumers who discussed the meaning and usage of several digital devices.
    Keywords: Consumer psychology, Internet, teenagers
    Date: 2008–10
  3. By: Gaudeul, Alexia; Mathieu, Laurence; Peroni, Chiara
    Abstract: Blogs differ from other media in that authors are usually not remunerated and inscribe themselves in communities of similarly minded individuals. Bloggers value reciprocal attention, interaction with other bloggers and information from reading other blogs; they value being read but also writing itself, irrespective of an audience. A novel dataset from a major blogging community, LiveJournal, is used to verify predictions from a model of social networking. Content production and blogging activity are found to be related to the size and degree of asymmetry of the relational networks in which bloggers are inscribed.
    Keywords: Blog; Internet; Media; Community; Social Network; Reciprocity; Livejournal; Web 2.0
    JEL: L82 Z13 D85
    Date: 2008–10–28
  4. By: Yannick Gabuthy (BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université Louis Pasteur - Strasbourg I); Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Nadège Marchand (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)
    Abstract: This paper presents an experiment performed to test the properties of an innovativebargaining mechanism (called automated negotiation) used to resolve disputes arising fromInternet-based transactions. The main result shows that the settlement rule tends to chillbargaining as it creates incentives for individuals to misrepresent their true valuations, whichimplies that automated negotiation is not able to promote agreements. However, this perverseeffect depends strongly on the conflict situation. When the threat that a disagreement occurs ismore credible, the strategic effect is reduced since defendants are more interested inmaximizing the efficiency of a settlement than their own expected profit. The implications ofthese results are then used to discuss the potential role of public regulation and reputationmechanisms in Cyberspace
    Keywords: : Online Dispute Resolution, Electronic Commerce, Bargaining, Arbitration,Experimental Economics
    Date: 2008
  5. By: Maximilian Kasy (UC-Berkeley, Department of Economics); Michael Kummer (Johannes Keppler University, Linz, Austria)
    Abstract: We analyze the behavior of start-ups in e-commerce, namely on Austria's leading price-comparison-site, a multi-product environment with almost complete information. We use weekly panel data on price-quotes of digicams, Audio/HiFi-equipment and hardware. We furthermore use advanced estimation methods, which, having only recently been introduced to IO, aim at using a minimum of modeling assumptions. Thus, being able to trace the behavior of roughly 350 start-up companies and 600 incumbents, we investigate whether start-ups have a different composition of product-portfolios, charge lower prices and offer fewer goods.
    Keywords: nonparametric estimation, panel data, start-up, entry, e-commerce, strategic behavior, pricing
    JEL: C14 C23 L11 L14 L81
    Date: 2008–09

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