nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2013‒10‒18
seven papers chosen by
Walter Frisch
University Vienna

  1. Searching for Physical and Digital Media: The Evolution of Platforms for Finding Books By Michael R. Baye; Babur De los Santos; Matthijs R. Wildenbeest
  2. Upstream Product Market Regulations, ICT, R&D and Productivity By Gilbert Cette; Jimmy Lopez; Jacques Mairesse
  3. Quantifying the Impacts of Digital Rights Management and E-Book Pricing on the E-Book Reader Market By Jin-Hyuk Kim; Tin Cheuk Leung
  4. Why Real Leisure Really Matters: Incentive Effects on Real Effort in the Laboratory. By Brice Corgnet; Roberto Hernán-González; Eric Schniter
  5. Platform or Wholesale? Different Implications for Retailers of Online Product By Young Kwark; Jianqing Chen; Srinivasan Raghunathan
  6. Deconstructing International Mergers: Information Technologies and Routineness By Basco, Sergi; Mestieri, Marti
  7. Privacy Expert Group Report on the Review of the 1980 OECD Privacy Guidelines By OECD

  1. By: Michael R. Baye; Babur De los Santos; Matthijs R. Wildenbeest
    Abstract: This paper provides a data-driven overview of the different online platforms that consumers use to search for books and booksellers, and documents how the use of these platforms is shifting over time. Our data suggest that, as a result of digitization, consumers are increasingly conducting searches for books at retailer sites and closed systems (e.g., the Kindle and Nook) rather than at general search engines (e.g., Google or Bing). We also highlight a number of challenges that will make it difficult for researchers to accurately measure internet-based search behavior in the years to come. Finally, we highlight a number of open agenda items related to the pricing of books and other digital media, as well as consumer search behavior.
    JEL: D83 L86
    Date: 2013–10
  2. By: Gilbert Cette; Jimmy Lopez; Jacques Mairesse
    Abstract: Our study aims at assessing the actual importance of the two main channels usually contemplated in the literature through which upstream sector anticompetitive regulations may impact productivity growth: business investments in R&D and in ICT. We thus estimate what are the specific impacts of these two channels and their shares in total impact as against alternative channels of investments in other forms of intangible capital we cannot explicitly consider for lack of appropriate data such as improvements in skills, management and organization. For this, we specify an extended production function relating productivity explicitly to R&D and ICT capital as well as to upstream regulations, and two factor demand functions relating R&D and ICT capital to upstream regulations. These relations are estimated on the basis of an unbalanced panel of 15 OECD countries and 13 industries over the period 1987-2007. Our estimates confirm the results of previous similar studies finding that the impact of upstream regulations on total factor productivity can be sizeable, and they provide evidence that a good part of the total impact, though not a predominant one, goes through both investments in ICT and R&D, and particularly the latter.
    JEL: C23 L16 L5 O43 O47
    Date: 2013–10
  3. By: Jin-Hyuk Kim (Department of Economics, University of Colorado at Boulder); Tin Cheuk Leung (Department of Economics, Chinese University of Hong Kong)
    Abstract: The demand for electronic books (e-books) and the e-book readers are complementary. On the one hand, the emergence of e-book readers such as Amazon's Kindle has triggered the recent growth of the e-book market. On the other hand, several issues in the e-book market can affect the future of the e-book reader market. Considering this complementarity, this paper quantifies the impact of digital rights management (DRM) and discounted e-book pricing on the demand for e-book readers. We collect conjoint survey data to estimate a random coefficient demand model using a hierarchical Bayesian method. Our counterfactual experiments suggest two things. First, Kindle's and Nook's market shares would increase by dropping DRM. Consumer welfare would increase seven percent if all e-book readers dropped DRM. Second, an increase in e-book prices would increase iPad's market share at the expense of that of Kindle and Nook. Consumer welfare would decrease 6 to 10 percent if Kindle's and Nook's e-book prices went up by 50 percent.
    Keywords: electronic book, demand estimation, DRM, agency model
    JEL: L15 L63 O30
    Date: 2013–09
  4. By: Brice Corgnet (Argyros School of Business and Economics, Chapman University); Roberto Hernán-González (Universidad de Granada); Eric Schniter (Economic Science Institute, Chapman University)
    Abstract: On-the-job leisure is a pervasive feature of the modern workplace. We studied its impact on work performance in a laboratory experiment by either allowing or restricting Internet access. We used a 2×2 experimental design in which subjects completing real-effort work tasks could earn cash according to either individual- or team-production incentive schemes. Under team pay, production levels were significantly lower when Internet browsing was available than when it was not. Under individual pay, however, no differences in production levels were observed between the treatment in which Internet was available and the treatment in which it was not. In line with standard incentive theory, individual pay outperformed team pay across all periods of the experiment when Internet browsing was available. This was not the case, however, when Internet browsing was unavailable. These results demonstrate that the integration of on-the-job leisure activities into an experimental labor design is crucial for uncovering incentive effects.
    Keywords: Incentive, Free riding, Internet access, Experimental method
    JEL: C92 D23 M52
    Date: 2013
  5. By: Young Kwark (Warrington College of Business Administration, University of Florida); Jianqing Chen (Jindal School of Management, The University of Texas at Dallas); Srinivasan Raghunathan (Jindal School of Management, The University of Texas at Dallas)
    Abstract: Online retailing is dominated by a channel structure in which a retailer either buys products from competing manufacturers and resells to consumers (wholesale scheme) or lets manufacturers directly sell to consumers on its platform for a commission (platform scheme), and is characterized by easy access to product reviews to facilitate consumers' purchase decisions. We study how different types of information revealed by reviews affect the retailer under the wholesale scheme and platform scheme. We find that information provided by reviews on quality dimension homogenizes consumers' perceived utility differences between products and increases upstream competition, which benefits the retailer under the wholesale scheme but hurts the retailer under the platform scheme. Information provided by reviews on fit dimension heterogenizes consumers' estimated fits to products and softens upstream competition, which hurts the retailer under the wholesale scheme and benefits the retailer under the platform scheme. Together, we demonstrate that the quality information and fit information play very different roles in changing upstream competition, and whether the retailer benefits from reviews critically depends on its pricing scheme choice.
    Keywords: Online Product Reviews, Pricing Scheme, Competition
    JEL: L11 L15 D83
    Date: 2013–09
  6. By: Basco, Sergi; Mestieri, Marti
    Abstract: This paper empirically analyzes how the adoption of Information Technologies (IT) has changed the organization of the supply chain of Northern firms. We focus on international mergers, which are a growing and important component of foreign direct investment. We use data on North-South vertical mergers and acquisitions for all manufacturing industries. We show that the effect of IT adoption on the number of vertical mergers and acquisitions is decreasing with the “routineness” of the industry. Our interpretation is that the IT revolution has enabled new monitoring mechanisms. This has allowed Northern headquarters to better monitor suppliers, specially those in less routine-intensive industries –which were harder to monitor prior to the IT revolution.
    Keywords: Mergers and Acquisitions, Information Technologies, Routine Intensity.
    JEL: D23 F14 F23 L22
    Date: 2013–07
  7. By: OECD
    Abstract: The work of the expert group played an essential role in a process which concluded in July 2013 with the adoption by the OECD Council of the first revisions to the OECD Privacy Guidelines since their original release in 1980. This document identifies a number of issues that were raised but not fully addressed as part of the review process and which could be considered as candidates for possible future study.
    Date: 2013–10–11

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