Online information privacy and price: A theoretical model and empirical tests

2022 | Information & Management | Citations: 3

Authors: Wu, Zhiyan; Luo, Jifeng

Abstract: Information privacy has become an increasingly critical concern for many individ ... Expand

Abstract: Information privacy has become an increasingly critical concern for many individuals, especially in the context of the increased collection, analysis, and visualization of personal information. Despite the importance of privacy in online transactions, most studies investigated the effects of privacy concerns on stated intentions. This study theoretically analyzes and empirically evaluates the link between privacy and price. In the proposed model, consumers are differentiated not only by their preferences for privacy but also by search costs. For simplicity, stores in the proposed model differ in terms of the price charged and the privacy protection level offered. As derived from the theoretical model and empirical validation, better privacy protection does not necessarily lead to the highest price, though it does allow stores to charge a premium price. Moreover, the price premium is higher if more consumers remain uninformed, indicating that uninformed consumers exert negative impacts on informed consumers. Collapse

Topics: privacy electronic commerce logistics management vertical differentiation website

Methods: experiment survey regression analysis method discrete choice experiment hierarchical linear modeling

Theories: lemon market theory

Altruism or Shrewd Business? Implications of Technology Openness on Innovations and Competition

2020 | Management Information Systems Quarterly | Citations: 0

Authors: He Huang; Parker, Geoffrey; Yinliang (Ricky) Tan; Hongyan Xu

Abstract: In today’s highly competitive business environment, a growing number of high-tec ... Expand

Abstract: In today’s highly competitive business environment, a growing number of high-tech firms are opening their technologies. We explore the rationale behind this unusual sharing behavior in order to understand whether it is altruism or a shrewd business move. We construct an analytical model where competing firms can choose technology openness, prototype release, or technology closedness as the technology openness strategy and make subsequent innovations on the adopted technology. In contrast to literature focusing on the demand side, our study reveals a novel explanation by shedding light on two effects of supply side. First, openness generates an information effect through which it reveals technology information to the competitor. Second, openness might also lead to an access effect in which the competitor might become a “copycat” by exerting a learning effort. Our analysis suggests that a firm’s openness decision depends upon the trade-off between both effects, and the interplay is moderated by the learning costs. We find that sharing technology can alleviate costly innovation competition under certain conditions. More importantly, our results reveal that openness does not necessarily translate to higher innovation and greater consumer surplus as conventional wisdom suggests. We also illustrate the robustness of the basic rationale and enrich our findings through several extended models. Collapse

Topics: innovation management consumer surplus IS economics IS value network effect

Methods: design artifact mathematical model literature study conceptual modelling design science

The promising future of healthcare services: When big data analytics meets wearable technology

2016 | Information & Management | Citations: 4

Authors: Wu, Jing; Li, He; Cheng, Sherri; Lin, Zhangxi

Abstract: As policy-makers and business practitioners across the globe expend extraordinar ... Expand

Abstract: As policy-makers and business practitioners across the globe expend extraordinary effort toward the field of e-health, the thriving development of healthcare-wearable technology is creating great opportunities and posing a remarkable future for healthcare services. This paper employs a game theory model to investigate the dynamics of wearable device market. We extend the two-dimensional product differentiation model by incorporating consumer diversity, consumer density, and firms’ big data analytics (BDA) investment strategy. Our model reveals that with differentiated consumer densities firms are more likely to engage in quality competition and the firm that invests in BDA can achieve higher profits. Furthermore, the overall quality of biomedical and healthcare services can be improved under various market conditions. Our findings provide practical guidance to wearable device manufacturers on optimizing competition strategies and offer insights to social planners on potential policy-making to promote better healthcare services. Collapse

Topics: smart wearable device IS economics product differentiation privacy economic surplus

Methods: simulation game theoretical model

Pricing and disseminating customer data with privacy awareness

2014 | Decision Support Systems | Citations: 1

Authors: Li, Xiao-Bai; Raghunathan, Srinivasan

Abstract: Organizations today regularly share their customer data with their partners to g ... Expand

Abstract: Organizations today regularly share their customer data with their partners to gain competitive advantages. They are also often requested or even required by a third party to provide customer data that are deemed sensitive. In these circumstances, organizations are obligated to protect the privacy of the individuals involved while still benefiting from sharing data or meeting the requirement for releasing data. In this study, we analyze the tradeoff between privacy and data utility from the perspective of the data owner. We develop an incentive-compatible mechanism for the data owner to price and disseminate private data. With this mechanism, a data user is motivated to reveal his true purpose of data usage and acquire the data that suits to that purpose. Existing economic studies of information privacy primarily consider the interplay between the data owner and the individuals, focusing on problems that occur in the collection of private data. This study, however, examines the privacy issue facing a data owner organization in the distribution of private data to a third party data user when the real purpose of data usage is unclear and the released data could be misused. Collapse

Topics: privacy vertical differentiation marketing management price management database system

Methods: archival research

The Impact of Malicious Agents on the Enterprise Software Industry

2010 | Management Information Systems Quarterly | Citations: 16

Authors: Galbreth, Michael R.; Shor, Mikhael

Abstract: In this paper, a competitive software market that includes horizontal and qualit ... Expand

Abstract: In this paper, a competitive software market that includes horizontal and quality differentiation, as well as a negative network effect driven by the presence of malicious agents, is modeled. Software products with larger installed bases, and therefore more potential computers to attack, present more appealing targets for malicious agents. One finding is that software firms may profit from increased malicious activity. Software products in a more competitive market are less likely to invest in security, while monopolistic or niche products are likely to be more secure from malicious attack. The results provide insights for IS managers considering enterprise software adoption. Collapse

Topics: horizontal differentiation enterprise information system IT manager vertical differentiation technology adoption

Methods: literature study

Theories: lemon market theory

The optimal software licensing policy under quality uncertainty

2002 | International Conference on Information Systems | Citations: 3

Authors: Zhang, Jie; Seidmann, Abraham

Abstract: The rapid rate of standard software development, and the need of users to stay c ... Expand

Abstract: The rapid rate of standard software development, and the need of users to stay current, has unleashed unprecedented levels of process and product innovations in the software industry. A new service model has emerged which delivers application software and services over the Web on a lease or subscription basis. Software vendors such as Sun, Oracle, and Microsoft have already adopted this innovative business model. They have expanded their sales offerings with lease contracts that augment their traditional one-time purchase transactions. Collapse

Topics: network effect price management price discrimination innovation management system quality