James R. Marsden

The Effect of Digital Sharing Technologies on Music Markets: A Survival Analysis of Albums on Ranking Charts

Recent technological and market forces have profoundly impacted the music industry. Emphasizing threats from peer-to-peer (P2P) technologies, the industry continues to seek sanctions against individuals who offer a significant number of songs for others to copy. Combining data on the performance of music albums on the Billboard charts with file sharing data from a popular network, we assess the impact of recent developments related to the music industry on survival of music albums on the charts and evaluate the specific impact of P2P sharing on an albums survival on the charts. In the post-P2P era, we find significantly reduced chart survival except for those albums that debut high on the charts. In addition, superstars and female artists continue to exhibit enhanced survival. Finally, we observe a narrowing of the advantage held by major labels. The second phase of our study isolates the impact of file sharing on album survival. We find that, although sharing does not hurt the survival of top-ranked albums, it does have a negative impact on low-ranked albums. These results point to increased risk from rapid information sharing for all but the “cream of the crop.”

Impact of Legal Threats on Online Music Sharing Activity: An Analysis of Music Industry Legal Actions*

The music industry has repeatedly expressed concerns over potentially devastating impacts of online music sharing. Initial attempts to control online file sharing have been primarily through consumer education and legal action against the operators of networks that facilitated file sharing. Recent legal action against individual file sharers marked an unprecedented shift in the industry’s strategy. The focus now is on well‐publicized legal threats and actions on a relatively small group of individuals to discourage overall music file sharing. To determine the resulting impact of these legal threats, we passively tracked online file‐sharing behavior of over 2,000 individuals. We found that individuals who share a substantial number of music files react to legal threats differently from those who share a lesser number of files. Importantly, our analysis indicates that even after these legal threats and the resulting lowered levels of file sharing, the availability of music files on these networks remains substantial.

Consumer Search and Retailer Strategies in the Presence of Online Music Sharing

Advances in online technologies and bandwidth availability have opened new vistas for online distribution of digital goods, but potential benefits for consumers are juxtaposed against challenges for retailers. Here, we investigate one type of digital experience good—music—whose market environment includes the very real presence of online piracy. Although arguments abound for and against online distribution of such digital goods, little research exists in this area. We develop a model of consumer search for such an experience good, and study different emerging market environments for retailers, where consumers can pirate music online. Retailer cost to publishers is modeled using a variety of licensing schemas. Survey results, together with data from online sharing networks, are utilized to validate a key assumption. Finally, computational analysis is used to develop insights that cannot be obtained analytically. Our results indicate that decreasing piracy is not necessarily equivalent to increasing profit, and online selling strategies can provide additional profits for a traditional retailer even in the presence of piracy. We show that leading strategies for business in such goods should include pricing options, provision of efficient search tools, and new licensing structures.

An Examination of Market Efficiency in British Racetrack Betting

The nature of the British racetrack betting market provides a distinctly different opportunity for testing market efficiency. On the basis of data from a single racing season, we compare the returns to two similar forms of betting: (1) starting price bets placed with bookmarkers and (2) pari-mutuel tote bets. Our analysis indicates that tote returns are consistently higher than starting price returns, even though both betting forms are of similar risk and the payoffs are widely reported. The persistently higher tote returns suggest that the British racetrack betting market does not satisfy the conditions of semistrong efficiency. Our results also provide indirect support that the market fails to meet the conditions for strong efficiency.

Decision making under time pressure with different information sources and performance-based financial incentives: part 1

We are witness to the communications revolution and the accompanying proliferation of narrow-purpose, mobile, computing and communication devices. Such devices tend to be smaller and lighter than their desktop and laptop counterparts. The tradeoff is that their displays and memory also tend to be relatively smaller. To date, they also rely on traditional English and/or icons for communicating with users. While icons have grown in usage, capturing any and all information using icons is impossible and/or prohibitively expensive. We examine the viability of developing new kinds of communication languages for such devices in a specific setting by considering an abstract classification task and examining the performance of subjects using a new, compact language that we have devised vis-a-vis written and spoken English. Our work draws on prior research on induced value experimentation and ex-ante system evaluation. In Part 1 of this two-part paper, we provide the necessary background, discuss the underlying motivations, and describe the construction and refinement of our experimental platform and an accompanying subject training software suite.

Transformational issues of big data and analytics in networked business

The era of big data and analytics is upon us and is changing the world dramatically. The field of Information Systems should be at the forefront of understanding and interpreting the impact of both technologies and management so as to lead the efforts of business research in the big data era. We need to prepare ourselves and our students for this changing world of business. In this discussion, we focus on exploring the technical and managerial issues of business transformation resulting from the insightful adoption and innovative applications of data sciences in business. We end by providing an overview of the papers included in this special issue and outline future research directions.

Duplicating Moody's Municipal Credit Ratings:

In this article we have shown that it is possible to duplicate with fairly high accuracy the credit ratings recently published in Moodys Analytical Overview of 25 Leading U.S. Cities. Using multiple discriminant analysis and a set of nine discriminating variables, we can predict the distribution of cities among five credit rating categories with 83% accuracy and among two aggregated cate gorres with 95% accuracy. Our accuracy rate is much higher than that of pre vious studies in this field. However, we wish to offer a note of caution in re porting our results. The sample we worked with was relatively small. We used it because it seemed to us that the publication of Moodys Analytical Overview provided a unique set of comparable intercity financial data and therefore a new opportunity to attempt a duplication of their ratings. We are pleased with the predictive accuracy we achieve but feel that before we can be sure that our techniques are reliable, future research using a larger sample and perhaps a greater number of variables is needed.

Design and Use of Preference Markets for Evaluation of Early Stage Technologies

In the work presented here, we develop and apply preference markets in evaluating early stage technology. Partnering with a Fortune 5 company, we developed and implemented two internal preference markets (field experiments). In both cases, nonmonetary (play money) incentives were utilized, but one market provided additional nonmonetary (play money) incentives. Working with the partner company, our investigation started with seven emerging technologies and expanded to a total of 17 emerging technologies. Our results suggest that even a simple form of additional nonmonetary play money incentive yielded greater price convergence, increased spread across final market prices, and greater consistency with a costly expert panel that was set up by the partner company. Based on the outcomes of our analyses, the partner company is investing in developing extended applications of preference markets as a potentially scalable approach for dealing with its ongoing and expanding strategic identification of promising emerging technologies.

Are joint bidding and competitive common value auction markets compatible?—some evidence from offshore oil auctions☆

Abstract In this paper we consider whether joint bidding for oil leases in U.S. Department of the Interior Outer Continental Shelf (OCS) auctions has been compatible with the maintenance of competition in these auctions. In 1975 eight major oil companies were banned from being co-bidders on any joint bids, apparently due to concern that joint bidding was fostering collusion. Focusing on eight major companies, five of which were banned from joint bidding in 1975, we present evidence which strongly suggests that joint bidding was consistent with more competitive rather than less competitive behavior.

An Examination of Efficiency in British Racetrack Betting: Errata and Corrections

AbstractShortly after the publication of our paper in this Journal (Gabriel and Marsden 1990), we received a kind letter with several informational questions from Paddy Waldron, a graduate student at Wharton and long-time “punter” (bettor) in his native Ireland. One of Waldrons questions caused us to recheck the original source (The Sporting Chronicle Handicap Book, 1978) from which our data were gathered by research assistants. As his questions suggested to us, we discovered that a footnote had been overlooked and that the tote returns on Irish races included in the flat season (about 27 percent of all such races) are quoted as returns on a 20-pence bet (their minimum bet) rather than as returns on the 10-pence minimum used for reporting the other flat races. Thus we found that we had overstated the tote returns. We completely recollected all our data, making the necessary adjustments for Irish races and adding in eight races that had been reported out of sequence in the Handicap Book…