nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2011‒08‒02
seven papers chosen by
Walter Frisch
University Vienna

  1. Human capital and the adoption of information and communications technologies: Evidence from investment climate survey of Pakistan By Mughal, Mazhar; Diawara, Barassou
  2. Comparison Sites By Jose Luis Moraga-Gonzalez; Matthijs R. Wildenbeest
  3. Can a click buy a little happiness? The impact of business-to-consumer e-commerce on subjective well-being By Sabatini, Fabio
  4. Technology licensing by advertising supported media platforms: An application to internet search engines By Sapi, Geza; Suleymanova, Irina
  5. A Complex Network Analysis of the Weighted Graph of the Web2.0 Service Network By Kibae Kim; Jorn Altmann
  6. A Behavioural Analysis of Online Privacy and Security By Baddeley, M.
  7. Network Stability, Network Externalities and Technology Adoption By Catherine Tucker

  1. By: Mughal, Mazhar; Diawara, Barassou
    Abstract: This paper studies the impact of human capital on the adoption and diffusion of Information and Communications Technologies (ICT) in the Pakistani firms using the World Bank Enterprise Survey 2002-07. The paper considers various indicators of human capital and measures of ICT adoption and diffusion. On-the-job training, manager's level of qualification and production workers' level of education are found to positively determine the use of emails, website and other means of communication in a firm. The results are robust to the inclusion of geographical, sectoral and structural control variables. Firm size, sales and workers' compensation are also positively associated with the use of ICT. The findings show the importance of accumulation and development of human capital in the productivity growth in the era of skill-biased technical change. A concerted national effort for the enhancement of the workforce's computing skills is therefore a must if a developing economy such as Pakistan is to improve its competitiveness. --
    Keywords: Human capital,education,ICT,Pakistan
    JEL: I21 O10
    Date: 2011
  2. By: Jose Luis Moraga-Gonzalez (ICREA, IESE Business School, and University of Groningen); Matthijs R. Wildenbeest (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)
    Abstract: Web search technologies are fundamental tools to easily navigate through the huge amount of information available in the Internet. One particular type of search technologies are the so- called shopbots, or comparison sites. The emergence of Internet shopbots and their implications for price competition and market efficiency are the focus of this chapter. We develop a simple model where a price comparison site tries to attract (possibly vertically and horizontally differentiated) online retailers on the one hand, and consumers on the other hand. The analysis of the model reveals that differentiation among the products of the retailers as well as their ability to price discriminate between on- and off-comparison-site consumers play a critical role. When products are homogeneous, if online retailers cannot charge different on- and off-the-comparison- site prices, then the comparison site has incentives to charge fees so high that some firms are excluded, which generates price dispersion and an inefficient outcome. By contrast, when on- and off-comparison-site prices can be different, the comparison site attracts all the players to the platform and the allocation is efficient. A similar result obtains when products are horizontally differentiated. In that case, the comparison site becomes an aggregator of product information and no matter whether firms can price discriminate or not, the comparison site attracts all the players to the platform and an efficient outcome ensues. We argue that the lack of vertical product differentiation may also be critical for this efficiency result. In fact, we show that when quality differences are large, the comparison site may find it profitable to charge fees such that low quality producers are excluded, thereby inducing an inefficient outcome.
    JEL: L0
    Date: 2011–05
  3. By: Sabatini, Fabio
    Abstract: This paper presents the first empirical investigation into the effect of e-shopping on subjective well-being. The analysis relies on an Italian nationally and regionally representative dataset from Italy (n = 4,130) drawn from the 2008 wave of the Survey of Household Income and Wealth (SHIW) carried out by the Bank of Italy. Probit, OLS regressions and instrumental variables estimates show that e-shopping is strongly and positively associated with subjective well-being.
    Keywords: happiness; subjective well-being; Internet; business-to-consumer e-commerce; B2C; e-shopping; instrumental variables; Italy
    JEL: I31 E2 Z19 L86
    Date: 2011–07–24
  4. By: Sapi, Geza; Suleymanova, Irina
    Abstract: We develop a duopoly model with advertising supported platforms and analyze incentives of a superior firm to license its advanced technologies to an inferior rival. We highlight the role of two technologies characteristic for media platforms: The technology to produce content and to place advertisements. Licensing incentives are driven solely by indirect network effects arising fromthe aversion of users to advertising. We establish a relationship between licensing incentives and the nature of technology, the decision variable on the advertiser side, and the structure of platforms' revenues. Only the technology to place advertisements is licensed. If users are charged for access, licensing incentives vanish. Licensing increases the advertising intensity, benefits advertisers and harms users. Our model provides a rationale for technology-based cooperations between competing platforms, such as the planned Yahoo-Google advertising agreement in 2008. --
    Keywords: Technology Licensing,Two-Sided Market,Advertising
    JEL: L13 L24 L86 M37
    Date: 2011
  5. By: Kibae Kim (Technical University of Braunschweig); Jorn Altmann (Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University)
    Abstract: Service providers that own Web2.0 services allow Internet users not only to access their Web2.0 services but also to create new Web2.0 services (mashups) based on theirs. This creation of mashups generates the Web2.0 service network, in which a node represents a Web2.0 service and a link between two nodes represents a mashup using the two Web2.0 services linked. Since this Web2.0 service network is constructed without the control of a single entity (i.e., it is self-organizing), the network topology of the Web2.0 service network shows the scale-free characteristic. With respect of the weighting of those links, however, there are different approaches. Prior research either considered binary links or links that are weighted by summing up the number of mashups. Since the last approach might overestimate the strength of the link, we calculate the link weights according to Newman’s approach in this paper. Based on this weighted graph of the Web2.0 service network, we investigate the topology of the weighted graph and examine the pattern of Web2.0 service creations. Our results show that the Newman-based weighted graph of the Web2.0 service network shows the characteristics of a scale-free network and a small-world network.
    Keywords: Web2.0 services, mashup, network topology analysis, self-organized networks, small-world networks, scale-free networks, complex networks.
    JEL: C02 C63 D80 D85 L86 O31
    Date: 2011–07
  6. By: Baddeley, M.
    Abstract: Psychological and sociological factors constrain economic decision-making in many contexts including the online world. Behavioural economics and economic psychology emphasise that people will make mistakes in processing information and in planning for the future; these mistakes will also distort learning processes. Emotions and visceral factors will play a key role - not only aecting people's actions but also distorting the interactions between information, learning and choices. This will have wide-ranging implications for online behavior and information security management, making people more vulnerable to security/privacy abuses including hacking, spam attacks, phishing, identity theft and online financial exploitation. These vulnerabilities raise crucial policy questions - recently made more pressing in the light of recent phone-hacking scandals in the UK. This paper outlines some of the behavioural factors affecting people's online behaviour and analyses real-world reactions to online fraud using evidence from the British Crime Survey 2009-10.
    JEL: D18 D83 K42
    Date: 2011–07–25
  7. By: Catherine Tucker
    Abstract: This paper investigates how the destabilizing of a social network may increase the scope of network externalities, using data on sales of a video-calling system made to an investment bank's employees and subsequent usage by these customers. The terrorist attacks of 2001 led potential customers in New York to start communicating with a new and less predictable set of people when their work teams were reorganized as a result of the physical displacement that resulted from the attacks. This did not happen in other comparable cities. These destabilized communication patterns were associated with potential adopters in New York being more likely to take into account a wider spectrum of the user base when deciding whether to adopt relative to those in other cities. Empirical analysis suggests that the aggregate effect of network externalities on adoption was doubled by this instability.
    JEL: L0 L86 L96
    Date: 2011–07

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