nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2014‒11‒07
four papers chosen by
Walter Frisch
Universität Wien

  1. Online networks and subjective well-being By Fabio Sabatini; Francesco Sarracino
  2. The Complementarities between Information Technologies Use, New Organizational Practices and Employees' Contextual Performance: Evidence from Europe in 2005 and 2010 By Adel Ben Youssef; Ludivine Martin; Nessrine Omrani
  3. Quality Choices and Reputation Systems in Online Markets - An Experimental Study By Sonja Brangewitz; Behnud Djawadi; Rene Fahr; Claus-Jochen Haake
  4. E-book Pricing and Vertical Restraints By Babur De los Santos; Matthijs Wildenbeest

  1. By: Fabio Sabatini; Francesco Sarracino
    Abstract: Does Facebook make people lonely and unhappy? Empirical studies have produced conflicting results about the effect of social networking sites (SNS) use on individual welfare. We use a representative sample of the Italian population to investigate how actual and virtual networks of social relationships influence subjective well-being (SWB). We find a significantly negative correlation between online networking and self-reported happiness. We address endogeneity in online networking by exploiting technological characteristics of the pre-existing voice telecommunication infrastructures that exogenously determined the availability of broadband for high-speed Internet. We try to further disentangle the direct effect of SNS use on well-being from the indirect effect possibly caused by the impact of SNS’s on trust and sociability in a SEM analysis. We find that online networking plays a positive role in SWB through its impact on physical interactions. On the other hand, SNS use is associated with lower social trust, which is in turn positively correlated with SWB. The overall effect of networking on individual welfare is significantly negative.
    Keywords: Social participation; online networks; Facebook; social trust; social capital; subjective well-being; hate speech; broadband; digital divide.
    JEL: C36 D85 O33 Z13
    Date: 2014–10–11
  2. By: Adel Ben Youssef (University of Nice Sophia Antipolis, France; GREDEG CNRS); Ludivine Martin (CEPS/INSTEAD – Luxembourg; CREM-CNRS Université de Rennes 1); Nessrine Omrani (Ecole Polytechnique & ADIS; Université Paris Sud)
    Abstract: This article investigates the relationship between Internet and computer use, new organizational practices and workers’ contextual performance in the European context. Our empirical results are based on data about more than 11,000 employees from 16 European countries in 2005 and more than 16,000 in 2010. First, we find asymmetric effects of IT use. Internet use is, indeed, positively related to all aspects of contextual performance in 2010, while computer use has been positively associated with contextual performance in 2005 but not in 2010. Second, we find that most of the considered new organizational practices have a positive relationship with employees’ contextual performance.
    Keywords: Contextual Performance, Information Technologies, New Organizational Practices, European workers
    JEL: J81 M12 M54 L23
    Date: 2014–10
  3. By: Sonja Brangewitz (University of Paderborn); Behnud Djawadi (University of Paderborn); Rene Fahr (University of Paderborn); Claus-Jochen Haake (University of Paderborn)
    Abstract: In internet transactions where customers and service providers often interact once and anonymously, a reputation system is particularly important to reduce information asymmetries about product quality. In this study we experimentally examine the impact of the customers' evaluation abilities on strategic quality choices of a service provider. Our study is motivated by a simple theoretical model where short-lived customers are asked to evaluate the observed quality of the service provider's product by providing ratings to a reputation system. A reputation profile informs about the ratings of the last three sales. This profile gives new customers an indicator for the quality they have to expect and determines the sales price of the product. From the theoretical model we derive that the service provider's dichotomous quality decisions are independent of the reputation profile and depend only on the probabilities of receiving positive and negative ratings when providing low or high quality. However, when mapping our theoretical model to an experimental design we find that subjects in the role of the service provider deviate from optimal behavior and choose actions which are conditional on the current reputation profile. In addition, increasing the probability of a negative rating and decreasing the probability of a positive rating both do not affect strategic quality choices.
    Keywords: Product Quality, Reputation Systems, Online Markets, Experimental Economics, Markovian Decision Process
    JEL: C73 C91 L12 L15 L86
    Date: 2014–10
  4. By: Babur De los Santos (Indiana University, Kelley School of Business, 1309 E 10th St, Bloomington, IN 47405, USA); Matthijs Wildenbeest (Indiana University, Kelley School of Business, 1309 E 10th St, Bloomington, IN 47405, USA)
    Abstract: This paper empirically analyzes how the use of vertical price restraints has impacted retail prices in the market for e-books. In 2010 five of the six largest publishers simultaneously adopted the agency model of book sales, allowing them to directly set retail prices. This led the Department of Justice to file suit against the publishers in 2012, the settlement of which prevents the publishers from interfering with retailers' ability to set e-book prices. Using a unique dataset of daily e-book prices for a large sample of books across major online retailers, we exploit cross-publisher variation in the timing of the return to the wholesale model to estimate its effect on retail prices. We find that e-book prices for titles that were previously sold using the agency model decreased by 18 percent at Amazon and 8 percent at Barnes & Noble. Our results are robust to different specifications, placebo tests, and synthetic control groups. Our findings illustrate a case where upstream firms prefer to set higher retail prices than retailers and help to clarify conflicting theoretical predictions on agency versus wholesale models.
    Keywords: e-books, agency, vertical restraints, most favored nation, media economics, resale price maintenance, Amazon
    JEL: D43 D83 L13 L41 L42
    Date: 2014–09

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