Token Incentives in a Volatile Crypto Market: The Effects of Token Price Volatility on User Contribution

2023 | Journal of Management Information Systems | Citations: 0

Authors: Chen, Kun; Fan, Yifan; Liao, Shaoyi Stephen

Abstract: Crypto tokens, issued and managed via smart contracts, function as rewards in bl ... Expand

Abstract: Crypto tokens, issued and managed via smart contracts, function as rewards in blockchain systems to encourage user participation. Distinct from monetary incentives, token incentives are uncertain in reward magnitude due to the large swings in token prices on crypto markets. By focusing on token price volatility, this study investigates how the reward uncertainty affects user contribution in a tokenized digital platform. Our empirical setting is Steemit, a platform where bloggers write posts and share token rewards based on their posts' popularity. We find that while high token price volatility induces a large volume of blog posts, it diminishes post quality. The dichotomous effects are explained via two mechanisms: users' direct reactions to reward uncertainties and their indirect reactions, mediated by altered token preference amid volatility shocks. Deeply exploring this dynamic process, our results reveal that token price volatility facilitates a platform's network short-term effect but impairs long-term user creativity. Our empirical findings thus extend the literature on blockchain economics and cryptocurrencies and have practical implications for the design of incentive mechanisms on tokenized digital platforms. Collapse

Topics: blog blockchain digital platform cryptocurrency user behavior

Methods: longitudinal research instrumental variables estimation data transformation principal component analysis vector autoregression

Theories: motivation crowding theory

Impact of Bot Involvement in an Incentivized Blockchain-Based Online Social Media Platform

2023 | Journal of Management Information Systems | Citations: 0

Authors: Delkhosh, Fatemeh; Gopal, Ram D.; Patterson, Raymond A.; Yaraghi, Niam

Abstract: Incentivized blockchain-based online social media (BOSM), where creators and cur ... Expand

Abstract: Incentivized blockchain-based online social media (BOSM), where creators and curators of popular content are paid in cryptocurrency, have recently emerged. Traditional social media ecosystems have experienced significant bot involvement in their platforms, which has often had a negative impact on both users and platforms. BOSM can provide additional direct financial incentives as motivation for both bots' and human users' engagement. Using the panel vector autoregression and regression discontinuity in time framework, we analyze two distinct data sets from Steemit, the largest and most popular BOSM, to study the impact of bot engagement on human users and the impact of changes in financial reward on user engagement. Interestingly, our findings demonstrate that while increased engagement by bots is positively associated with engagement by human users, the association between bot engagement and human user engagement decreases as the number of votes for a post increases. We also find that shifts in economic incentives significantly influence the behavior of both human users and bots. This research provides significant insights on how social media platforms can leverage economic incentives to influence user behavior and, more importantly, leverage bots' activity to increase the engagement of their human users. Collapse

Topics: social media user behavior application programming interface participatory design blockchain

Methods: longitudinal research theory development design methodology regression discontinuity design vector autoregression

Extended Generativity Theory on Digital Platforms

2023 | Information Systems Research | Citations: 2

Authors: Fürstenau, Daniel; Baiyere, Abayomi; Schewina, Kai; Schulte-Althoff, Matthias; Rothe, Hannes

Abstract: The assumption that generativity engenders unbounded growth has acquired an almo ... Expand

Abstract: The assumption that generativity engenders unbounded growth has acquired an almost taken-for-granted position in information systems and management literature. Against this premise, we examine the relationship between generativity and user base growth in the context of a digital platform. To do this, we synthesize the literature on generativity into two views, social interaction (expansion of ecosystem boundaries) and product view (expansion of product boundaries), that jointly and individually relate to user base growth. Both views help us explain how opening a platform relates to the emergence and resolution of conflicting expectations in a platform ecosystem that result in new functions and expanded use. We adopt a panel vector autoregressive approach combining data from six large transaction platforms that engaged with open-source developer communities. We found that the dominant narrative of generativity engendering growth, although generally supported by our analysis, obscures the fact that the inverse is also true; that is, growth can lead to expansion of product boundaries (inverse generativity) and that generativity can be bounded; that is, growth can stabilize ecosystem boundaries (bounded generativity). Against this background, we propose an extended generativity theory that presents generativity and growth in an integrative view and raises awareness about the limitations of the “unbounded growth” claim. We conclude that there is value in separating the two views of generativity conceptually and analytically, along with their relationship to user base growth, and we call for research on the pathways through which generativity produces growth. History: Ola Henfridsson, Senior Editor; Robert Wayne Gregory, Associate Editor. Collapse

Topics: digital platform innovation management open source electronic commerce accounting

Methods: longitudinal research Granger causality time series analysis Student's t-test parametric test

Derivative Work in Open-license Platforms

2023 | International Conference on Information Systems | Citations: 0

Authors: Joo, Heejin; Maruping, Likoebe

Abstract: The emergence of derivative works in open-license platforms has sparked inquiri ... Expand

Abstract: The emergence of derivative works in open-license platforms has sparked inquiries regarding their impact on original works and the platform as a whole. While it is widely recognized that derivative works may compete with the original content, there are also arguments that they can augment traffic and engagement. This remains an open empirical question. We extend the conceptualization of derivative works to open-license platform environments and then explore the implications of such works. Our empirical analysis of original music videos and corresponding reaction videos on YouTube shows that derivative works are complementary to original works and to the platform ecosystem. The findings shed new light on both the complex impact of derivative videos in open-license environments -as well as its broader strategic significance for platform operators seeking sustainable long-term growth opportunities. Collapse

Topics: digital ecosystem YouTube application programming interface intellectual property business model

Methods: Granger causality longitudinal research theory development field study vector autoregression

Where is IT in Information Security? The Interrelationship among IT Investment, Security Awareness, and Data Breaches

2023 | Management Information Systems Quarterly | Citations: 1

Authors: Li, Wilson Weixun; Leung, Alvin; Yue, Wei

Abstract: Data breaches can severely damage a firm's reputation and its customers' confid ... Expand

Abstract: Data breaches can severely damage a firm's reputation and its customers' confidence. Firms must therefore continuously invest in security measures to prevent such breaches. However, the effectiveness of security investment has been questioned by both practitioners and academics. We illustrate the bidirectional dynamic relationship between information technology (IT) investment and data breaches moderated by threat and countermeasure security awareness using an eight-year panel of 311 U.S.-listed firms to provide empirical evidence that threat awareness broadens firms' scope for addressing databreach issues by investing more in IT than in security. Countermeasure awareness equips firms with sufficient knowledge and experience to ensure effective implementation of IT, which provides more comprehensive protection than security investment alone. Our results suggest that firms should evolve beyond the reactive mindset of solely upgrading security and begin nurturing both threat awareness and countermeasure awareness to address the underlying IT system issues that are the cause of data breaches. Collapse

Topics: IT investment data breach IT security defense data security IT security threat

Methods: longitudinal research robustness check autocorrelation analysis survey literature study

Theories: institutional theory protection motivation theory

Impact of Open-Source Community on Cryptocurrency Market Price: An Empirical Investigation

2023 | Journal of Management Information Systems | Citations: 0

Authors: Petryk, Mariia; Qiu, Liangfei; Pathak, Praveen

Abstract: Although the prices of cryptocurrencies remained volatile for the past decade, t ... Expand

Abstract: Although the prices of cryptocurrencies remained volatile for the past decade, the factors that impact the price dynamics of the new type of investment instrument have not been fully identified yet. In this study, we recognize the dual nature of cryptocurrencies, that is, being a software program and a financial instrument, and examine the impact of software advancement on the price dynamics of cryptocurrencies. The open-source software (OSS) platform functionality enables social behaviors that we use as signals. Using data from the largest OSS platform, we establish the connection between open-source activities and the price movement of cryptocurrency. In particular, as project popularity (forks and watches) and users' feedback (issues) increase, the market price increases by 4.3 percent, 2.4 percent, and 4.4 percent per annum, respectively. On the contrary, the number of code corrections (pull requests) is negatively related to prices leading to a 5 percent annual price decrease. Our results suggest that OSS contributions create a perfect selection mechanism, where higher quality projects receive more developers' attention and user feedback, whereas lower quality projects do not, thus creating the separating equilibrium. Collapse

Topics: cryptocurrency open source IT project systems development system quality

Methods: instrumental variables estimation longitudinal research computational algorithm theory development autocorrelation analysis

Theories: lemon market theory signaling theory

Digitalization of Loyalty: Impacts of Mobile Technology on Reward Redemption and Engagement Level

2023 | Journal of Management Information Systems | Citations: 0

Authors: Son, Yoonseock; Oh, Wonseok

Abstract: Although digitalization is a prevalent strategy in reward programs, a minimal am ... Expand

Abstract: Although digitalization is a prevalent strategy in reward programs, a minimal amount is known regarding the relationship between reward app usage and reward redemption behaviors. The enhanced availability and accessibility of information via mobile app can alter customers' reward-redemption patterns and engagement level, highlighting the need for firms to adjust their reward-based service strategies. Using unique datasets that reflect individual consumers' transactional and reward redemption behaviors, we conducted a series of analyses to capture the dynamics in the latent engagement state transitions of customers according to the type of reward program used. Results show that although reward app usage, on average, induces a more active engagement state, it polarizes the volatility of engagement state transitions. Furthermore, we find that greater volatility of engagement state transitions is significantly associated with a higher likelihood of churn. Finally, a follow-up survey and panel vector autoregression analyses are conducted to uncover the mechanisms that underlie the relationship. The results provide insights into how retailers can strategically design their reward programs in the emerging mobile-based omnichannel environment. Collapse

Topics: mobile application logistics management marketing management innovation management strategic management

Methods: survey longitudinal research descriptive statistic structural equation modeling vector autoregression

Theories: transaction cost economics

Cryptocurrency Market: The Interplay Between Microblog Dynamic Opinion Leader Sentiments and Bitcoin Pricing

2023 | Americas Conference on Information Systems | Citations: 0

Authors: Treku, Daniel; Wang, Bin; Escobari, Diego; Oraby, Tamer

Abstract: The relationship between tweet sentiment and cryptocurrency pricing has drawn a ... Expand

Abstract: The relationship between tweet sentiment and cryptocurrency pricing has drawn academic researchers' attention in recent years. However, empirical results have been inconsistent, and no research has examined the bidirectional relationship between cryptocurrency pricing and tweet sentiment nor the impacts of opinion leaders. In this research, we test the presence of bidirectional relationships between Bitcoin opinion leader tweet sentiments and Bitcoin price behaviors. By analyzing a big data set of 78 million Bitcoin-related tweets from 2014 to 2021 through vector autoregression modeling with exogenous variables, we reveal the influences of Bitcoin opinion leaders' tweet subjectivity and polarity on Bitcoin price return and volatility, as well as the reverse effects. Our research contributes to academic literature and business practice on cryptocurrency pricing, social media, and opinion leadership. KeywordsBitcoin cryptocurrency returns, social media sentiment analysis, opinion leader sentiment analysis, twitter microblogs. Collapse

Topics: Bitcoin Twitter cryptocurrency price management social media

Methods: longitudinal research vector autoregression descriptive statistic computational algorithm Granger causality

How product review voting is influenced by existing votes, consumer involvement, review valence, and review diagnosticity

2023 | Decision Support Systems | Citations: 0

Authors: Tseng, Shih-Lun; Lu, Shuya; Weathers, Danny; Grover, Varun

Abstract: Websites that allow consumers to post online reviews often allow others to signa ... Expand

Abstract: Websites that allow consumers to post online reviews often allow others to signal the value of the reviews by voting for them as being helpful (i.e., an upvote) or unhelpful (i.e., a downvote). Although a review's content should drive votes, herd behavior may also be operative if consumers discount their own judgments of the review based on signals others provide. Using a field study of online product reviews from Amazon, a longitudinal experiment, and two cross-sectional experiments, we find evidence for herd behavior: consumers' voting de­ cisions and intentions are influenced by others' votes. However, this effect is complex with multiple moderating factors, including consumer involvement, review valence, and review diagnosticity. We discuss the theoretical and practical implications of these findings for reducing the potential negative effects of herd behavior in the context of online reviews. Collapse

Topics: online review Reddit Twitter electronic commerce user-generated content

Methods: computational algorithm longitudinal research longitudinal experiment statistical hypothesis test parametric test

Theories: signaling theory

Winner Takes All? The Blockbuster Effect on Crowdfunding Platforms

2023 | Information Systems Research | Citations: 0

Authors: Wang, Zhiyi; Yang, Lusi; Hahn, Jungpil

Abstract: Crowdfunding platforms are characterized by an uneven distribution of quality an ... Expand

Abstract: Crowdfunding platforms are characterized by an uneven distribution of quality and resources. Some projects achieve outstanding and exceptional performance. Those projects, which we call “blockbuster projects,” are believed to have a considerable impact on crowdfunding platforms, especially on other concurrent projects. There are two plausible yet opposing predictions: they may exhibit both a negative effect by monopolizing backer attention and resources and a positive effect by increasing the activeness of backer side. This tension could be further complicated, considering that blockbusters are inherently heterogeneous, which could result in different interrelations with other concurrent projects. To fully understand this tension, this study examines the effects of blockbuster projects on the overall performance of concurrent projects on the platform and the nuances of such effects for different interrelations between blockbusters and other projects. Drawing on the cross-side network effects literature and integrating insights from the unique features of crowdfunding, we develop a theoretical framework that highlights the multidimensional view of blockbuster effects: we propose that blockbuster projects have an overall positive effect on the performance of concurrent projects (overall effect), and such positive effect is stronger for related blockbusters (local effect) and blockbusters emerging before the focal project (temporal effect). Using data from a leading reward-based crowdfunding platform, the proposed hypotheses are tested and largely supported. Additional analyses, based on off-platform data and backer data, verify the mechanism driving the blockbuster effects: blockbusters increase the popularity of the platform, whereby backers participating in the blockbusters tend to develop positive impressions and heightened expectations, so that they are likely to participate in other concurrent projects. This study contributes to the crowdfunding literature on interactions among projects, the literature on distinctive agents in online markets, and the cross-side network effects literature. We also discuss practical implications for project creators and platform operators. History: Anandasivam Gopal, Senior Editor; Sunil Wattal, Associate Editor. Funding: This work was supported by the National University of Singapore and the Singapore Ministry of Education Academic Research [Grants R-253-000-119-112 and R-253-000-136-114]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2022.1154. Collapse

Topics: crowdsourcing crowdfunding network effect Google+ consumer behavior

Methods: robustness check cluster analysis k-means clustering theory development econometric modeling