nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2014‒03‒30
six papers chosen by
Walter Frisch
University Vienna

  1. Disassembly and reassembly on digital technology and creative industries By Vincent Mangematin; Jonathan Sapsed; Elke Schüßler
  2. Efficient contracts for government intervention in promoting next generation communications networks By Briglauer, Wolfgang; Holzleitner, Christian
  3. Multiproduct airport competition and e-commerce strategies By Valentina Bracaglia; Tiziana D'Alfonso; Alberto Nastasi
  4. Facts and Figuring: An Experimental Investigation of Network Structure and Performance in Information and Solution Spaces By Jesse Shore; Ethan Bernstein; David Lazer
  5. How Placing Limitations on the Size of Personal Networks Changes the Structural Properties of Complex Networks By Somayeh Koohborfardhaghighi; Jorn Altmann
  6. We all do it, but are we willing to admit? Incentivizing digital pirates' confessions By Anna Kukla-Gryz; Michał Krawczyk; Konrad Siwiński; Joanna Tyrowicz

  1. By: Vincent Mangematin (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Jonathan Sapsed (University of Brighton - University of Brighton); Elke Schüßler (Freie University Berlin - Freie University Berlin)
    Abstract: This paper analyses the dynamics of disassembly and reassembly unfolding in selected creative industries through the advent of digital technology. It argues that a full understanding of the much-observed organizational or sectoral lock-in effects on the one hand, and the possibilities for transformation and innovation on the other is only gained by analyzing jointly how institutional logics, business models and creative processes are affected by digital technology and how they interrelate in producing stability or change. These three dimensions provide a framework for reviewing the findings of the papers comprised in the Special Issue and for integrating their insights towards a research agenda. This introduction starts with a reflection on creative industries classification systems and related possibilities for generalization and discusses how digital technology acts as a driver for disassembly and reassembly. It concludes by highlighting three avenues for further research.
    Keywords: Digital technology; creative industries; innovation; business models; institutional change; institutional logics; creative processes
    Date: 2014
  2. By: Briglauer, Wolfgang; Holzleitner, Christian
    Abstract: Although the future socio-economic benefits of a new fibre-based ('next generation access', NGA) telecommunications infrastructure seem to be uncontroversial, a universal NGA coverage appears to be a rather unrealistic objective without government intervention. We contend, however, that the current contract practice of fixing ex ante targets for network expansion is inefficient given the uncertainty about future returns on NGA infrastructure-based services and the public authorities' incomplete information about the capital costs of the network provider. This paper puts forward to delegate the choice of the network expansion to the NGA provider. --
    Keywords: contract theory,public utilities,next generation telecommunications networks,subsidies
    JEL: H20 L43 L44 L51 L52 L96
    Date: 2014
  3. By: Valentina Bracaglia (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"); Tiziana D'Alfonso (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"); Alberto Nastasi (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza")
    Abstract: We study airport competition when vertically differentiated products may be strategically offered at the time of ticket purchase through the Internet: a base product Ð the flight Ð and a composite one Ð the flight plus some premium commercials (PCs), as car parking, car rental or hotel reservation. We model a two stages game: first airports decide whether to offer PCs online, thus making the purchasing decisions interact through observability of aviation and commercial prices. Then, they engage in Bertrand competition deciding on both prices. We find that airports set lower aviation charge than they would have levied absent concessions, when they are both competing on online offers. Nevertheless, when only one airport pursues the online offer, that facility sets a higher aviation charge than it would have levied absent concessions, as long as profits from retail earned at the facility on the travel day are not high enough. This suggests that the combined effect between airports competition on side business and demand complementarity does moderate airports market power in the core business. The Nash equilibrium of the game is such that both airports offer PCs on line, making travelers account for the surplus they would gain from both the sides of the business when they buy air tickets. This is welfare enhancing. Nevertheless, when profits from retail earned at the airports on the travel day are sufficiently high, the facilities are caught in a PrisonerÕs Dilemma.
    Keywords: Airports competition; e-commerce; concessions; vertical differentiation
    Date: 2014
  4. By: Jesse Shore (Boston University - Department of Information Systems); Ethan Bernstein (Harvard Business School, Organizational Behavior Unit); David Lazer (Harvard University - Harvard Kennedy School (HKS))
    Abstract: Using data from a novel laboratory experiment on complex problem solving in which we varied the network structure of 16-person organizations, we investigate how an organization's network structure shapes performance in problem-solving tasks. Problem solving, we argue, involves both search for information and search for solutions. Our results show that the effect of network structure is opposite for these two important and complementary forms of search. Dense clustering encourages members of a network to generate more diverse information, but discourages them from generating diverse theories: in the language of March (1991), clustering promotes exploration in information space, but decreases exploration in solution space. Previous research, generally focusing on only one of those two spaces at a time, has produced inconsistent conclusions about the value of network clustering. By adopting an experimental platform on which information was measured separately from solutions, we were able to reconcile past contradictions and clarify the effects of network clustering on problem-solving performance. The finding both provides a sharper tool for structuring organizations for knowledge work and reveals the challenges inherent in manipulating network structure to enhance performance, as the communication structure that helps one antecedent of successful problem solving may harm the other.
    Keywords: networks, experiments, clustering, problem solving, exploration and exploitation, knowledge, information, communication, search
    Date: 2014–03
  5. By: Somayeh Koohborfardhaghighi (College of Engineering, Seoul National University); Jorn Altmann (College of Engineering, Seoul National University)
    Abstract: People-to-people interactions in the real world and in virtual environments (e.g., Facebook) can be represented through complex networks. Changes of the structural properties of these complex networks are caused through a variety of dynamic processes. While accepting the fact that variability in individual patterns of behavior (i.e., establishment of random or FOAF-type potential links) in social environments might lead to an increase or decrease in the structural properties of a complex network, in this paper, we focus on another factor that may contribute to such changes, namely the size of personal networks. Any personal network comes with the cost of maintaining individual connections. Despite the fact that technology has shrunk our world, there is also a limit to how many close friends one can keep and count on. It is a relatively small number. In this paper, we develop a multi-agent based model to capture, compare, and explain the structural changes within a growing social network (e.g., expanding the social relations beyond one's social circles). We aim to show that, in addition to various dynamic processes of human interactions, limitations on the size of personal networks can also lead to changes in the structural properties of networks (i.e., the average shortest-path length). Our simulation result shows that the famous small world theory of interconnectivity holds true or even can be shrunk, if people manage to utilize all their existing connections to reach other parties. In addition to this, it can clearly be observed that the network¡¯s average path length has a significantly smaller value, if the size of personal networks is set to larger values in our network growth model. Therefore, limitations on the size of personal networks in network growth models lead to an increase in the network¡¯s average path length.
    Keywords: Small-World Network, Complex Networks, Average Shortest Path Length, Size of Personal Networks, Network Growth Model.
    JEL: C02 C6 C15 D85
    Date: 2014–01
  6. By: Anna Kukla-Gryz (Faculty of Economic Sciences, University of Warsaw); Michał Krawczyk (Faculty of Economic Sciences, University of Warsaw); Konrad Siwiński (Faculty of Economic Sciences, University of Warsaw); Joanna Tyrowicz (Faculty of Economic Sciences, University of Warsaw)
    Abstract: In this study we try to assess the prevalence of illicit downloading in the market of audio books and the willingness to admit to such practices. We compare the Bayesian Truth Serum (Prelec, 2004) treatment in which truthful responses and precise estimates are rewarded to the control treatment with a flat participation fee. We find a sizable treatment effect - incentivized “pirates” admit approximately 60% more often than the non-incentivized ones.
    Keywords: illegal download, digital piracy, Bayesian Truth Serum, wages
    JEL: A13 C93 D12
    Date: 2014

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