Ravi Bapna

E‐knowledge networks for inter‐organizational collaborative e‐business

Evaluates the increase in inter‐ and intra‐organizational knowledge sharing capabilities brought about by the Internet‐driven “new economy” technologies and the resulting managerial implications. Presents a framework for evaluating and deploying such technologies. Firms employing knowledge networks can also use e‐knowledge to improve organizational decision making, react more quickly to changes in the economic landscape, and create dynamic custom content and consumer intimacy. Builds on the extensive literature in knowledge management and inter‐organizational systems by identifying the opportunities of each in creating “e‐knowledge networks” to support organizational collaboration. This framework is applied to four industry case studies – supply chain management networks, adserver networks, content syndication networks, and business‐to‐business exchange networks. Analysis suggests that in the new economy, characterized by ubiquitous and often automated information sharing capabilities, the ability to create knowledge‐based networks of partners will be critical to maintaining competitive advantage.

Consumer Surplus in Online Auctions

Despite the growing research interest in Internet auctions, particularly those on eBay, little is known about quantifiable consumer surplus levels in such mechanisms. Using an ongoing novel field experiment that involves real bidders participating in real auctions, and voting with real dollars, we collect and examine a unique dataset to estimate consumer surplus in eBay auctions. The estimation procedure relies mainly on knowing the highest bid, which is not disclosed by eBay, but is available to us from our experiment. At the outset we assume a private value second-price sealed-bid auction setting, as well as a lack of alternative buying options within or outside eBay. Our analysis, based on a sample of 4514 eBay auctions, indicates that consumers extract a median surplus of at least

Research Commentary---Cooperation, Coordination, and Governance in Multisourcing: An Agenda for Analytical and Empirical Research

4 per eBay auction. This estimate is unbiased under the above assumptions, and otherwise it is a lower bound. The distribution of surplus is highly skewed given the diverse nature of the data. We find that eBays auctions generate at least

A theoretical and empirical investigation of multi-item on-line auctions

7.05 billion in total consumer surplus in the year 2003 and may generate up to

A Market Design for Grid Computing

7.68 billion if the private value sealed-bid assumption does not hold. We check for the validity of our assumptions and the robustness of our estimates using an additional dataset from 2005 and a randomly sampled validation dataset from eBay.

When snipers become predators: can mechanism design save online auctions?

Multisourcing, the practice of stitching together best-of-breed IT services from multiple, geographically dispersed service providers, represents the leading edge of modern organizational forms. While major strides have been achieved in the last decade in the information systems (IS) and strategic management literature in improving our understanding of outsourcing, the focus has been on a dyadic relationship between a client and a vendor. We demonstrate that a straightforward extrapolation of such a dyadic relationship falls short of addressing the nuanced incentive-effort-output linkages that arise when multiple vendors, who are competitors, have to cooperate and coordinate to achieve the clients business objectives. We suggest that when multiple vendors have to work together to deliver end-to-end services to a client, the choice of formal incentives and relational governance mechanisms depends on the degree of interdependence between the various tasks as well as the observability and verifiability of output. With respect to cooperation, we find that a vendor must not only put effort in a “primary” task it is responsible for but also cooperate through “helping” effort in enabling other vendors perform their primary tasks. In the context of coordination, we find that task redesign for modularity, OLAs, and governance structures such as the guardian vendor model represent important avenues for further research. Based on the analysis of actual multisourcing contract details over the last decade, interviews with leading practitioners, and a review of the single-sourcing literature, we lay a foundation for normative theories of multisourcing and present a research agenda in this domain.

Do Your Online Friends Make You Pay? A Randomized Field Experiment on Peer Influence in Online Social Networks

In this paper we explore and analyze the structure of Internet auctions from an analytical and an empirical perspective. Such web‐based auctions are rapidly emerging as a mercantile process of choice in the electronic marketplace. We observe current Internet auctions for one‐time products, such as rapidly aging hardware, and analyze them within the framework of the existing auction theory. While traditional auction theory focuses on single‐item auctions, we observe that a majority of on‐line auctions are multi‐item auctions. A significant contribution of this work is the theoretical derivation of the structure of the winning bids in multi‐item progressive on‐line auctions. Additionally, for comparative purposes, we explore the structural characteristics of alternative multi‐item auction mechanisms proposed in the auction theory. We derive hypotheses based on our analytical results and compare two different types of auction mechanisms. We test the traditional auction theory assumption regarding the homogeneity of bidders and present the first ever empirically derived classification and performance‐comparison of on‐line bidders. We test our hypotheses using real‐world empirical data obtained by tracking a premier web‐based auction site. Statistical analysis of the data indicates that firms may gain by choosing alternative auction mechanisms. We also provide directions for further exploration of this emerging but important dimension of electronic commerce.

Infrastructure development for conversion to environmentally friendly fuel

Grid computing uses software to integrate computing resources, such as CPU cycles, storage, network bandwidth, and even applications, across a distributed and heterogeneous set of networked computers. It is now widely deployed by organizations and provides seamless temporary processing-capacity expansion to handle peak-period demand on e-commerce servers, distributed gaming, and content storage and distribution. We develop a market-based resource-allocation model that adds an economic layer to the current approach of treating resource allocation as primarily a scheduling issue. We design a value-elicitation and allocation scheme that provides the economic incentives for buyers and sellers of computing resources to exchange assets. We formulate the problem as a combinatorial call auction and present a portfolio of three solution approaches that trade off economic properties, such as allocative efficiency, incentive compatibility, and fairness in allocation, with computational efficiency. The first of these is an efficient solution that maximizes social welfare and yields incentive-compatible Vickrey-Clarke-Groves prices, but requires solving multiple instances of an NP-hard problem. For markets where having a commodity price is critical, we show how the addition of fairness constraints to the efficient model can somewhat reduce the computational burden and yet preserve incentive compatibility. Finally, for markets that require real-time fast solution techniques, we propose a time-sensitive fair Grid (tsfGRID) heuristic that relaxes the maximal allocation requirement of the welfare-maximizing fair solution. Its solution is not guaranteed to be incentive-compatible, but the heuristic is designed to be fast, maintain fairness in allocations, and yield commodity prices. Notably, while incentive compatibility is not guaranteed by tsfGRID, computational results comparing it with the efficient solution technique indicate that there are no significant differences in the expected-revenue and operational-allocative characteristics.

Human Capital Investments and Employee Performance: An Analysis of IT Services Industry

Online auction houses such as eBay, and to an extent Ubid, have become household names in today’s networked economy. They attract legions of buyers and sellers and have evolved from a bare-bones architecture designed solely to match buyers and sellers to a sophisticated virtual marketplace with value-added services such as feedback mechanisms, payment processing, and escrow services. In this article we take a critical look at the mechanism design choices the auctioneers have made. We predict that an emerging technological force, in the form of ubiquitous open-source smarter bidding agents, is likely to have a significant influence on their future practice. This position is substantiated through the use of common terminology in the subfield of micro-economics called mechanism design. This field deals with incentives and how they can be aligned to practically implement good systemic solutions to problems involving several self-interested economic agents. We discuss the mechanics of current bidding technology on eBay, compare the architecture of two relatively more sophisticated third-party bidding agents, and report on a field experiment that deployed one of these agents on eBay. We illustrate conditions where such agents could lower economic efficiency, promote collusive bidding, and ultimately push electronic auctions towards a precipice. We finish by demonstrating how an understanding of economic market mechanisms, through the introduction of news auctions rules, can help avoid this precipice. Consider the auction rules of eBay, the single largest online auction house. On eBay, bidding is done through the use of a proxy bidding agent. eBay’s bidding core is designed to bring out the effect of a second price auction, allocating the goods to the highest bidder at a bid increment above the second-highest bid. In its Web site, eBay encourages bidders to submit their maximum willingness to pay the first time they bid, with the assurance that the proxy bidding agent will register a bid that is only one bidincrement above the next lowest bid.

Cooperation, coordination, and governance in multisourcing

Demonstrating compelling causal evidence of the existence and strength of peer to peer influence has become the holy grail of modern research in online social networks. In these networks, it has been consistently demonstrated that user characteristics and behavior tend to cluster both in space and in time. There are multiple well-known rival mechanisms that compete to be the explanation for this observed clustering. These range from peer influence to homophily to other unobservable external stimuli. These multiple mechanisms lead to similar observational data, yet have vastly different policy implications. In this paper, we present a novel randomized experiment that tests the existence of causal peer influence in the general population -- one that did not involve subject recruitment for experimentation -- of a particular large-scale online social network. We utilize a unique social feature to exogenously induce adoption of a paid service amongst a group of randomly selected users, and in the process develop a clean exogenous randomization of treatment and control groups. A variety of nonparametric, semiparametric and parametric approaches, ranging from resampling-based inference to ego-level random effects to logistic regression to survival models, yield close to identical, statistically and economically significant estimates of peer influence in the general population of a freemium social network. Our estimates show that peer influence causes more than a 60% increase in odds of buying the service due to the influence coming from an adopting friend. In addition, we find that users with a smaller number of friends experience stronger relative increase in the adoption likelihood due to influence from their peers as compared to the users with a larger number of friends. Our nonparametric resampling procedure based estimates are helpful in situations of networked data that violate independence assumptions. We establish that peer influence is a powerful force in getting users from free to premium levels, a known challenge in freemium communities.