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All External Reference Prices Are Not the Same: How Magnitude, Source, and Fairness Shape Payment for Digital Goods
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2023 | Information Systems Research | Citations: 0
Authors: Bassellier, Geneviève; Ramaprasad, Jui

Abstract: External reference prices (ERPs) are recognized to influence consumers’ payment ... Expand

Abstract: External reference prices (ERPs) are recognized to influence consumers’ payment for physical goods. We examine the role of ERPs in a digital goods context, emphasizing the importance of disentangling the effects of two components of ERPs: the magnitude and the source. We first examine the impact of the price magnitude and then investigate how the impact of ERP magnitude is moderated by its source―the specific context in which the reference price is set—and by its perceived fairness. Using a laboratory experiment with 471 participants, we first establish that as an ERP increases, payment for digital songs also increases. Furthermore, the source of the ERP motivates payment differently. Indeed, consumers’ willingness to pay is more strongly influenced by a price recommended by the site than by information on the price paid by others. Last, we show that the perceived fairness of the ERP matters. Results indicate that when the ERP is perceived to be high, the marginal effect of an increase in ERP on payment is smaller than when it is perceived to be fair. We contribute to the understanding of the effect of ERPs in digital context, where the source of an ERP can be varied, and perception of fairness can be heterogenous across consumers. This has implications for the design of digital platforms seeking to sell digital goods using a flexible pricing scheme. History: Anandasivam Gopal, Senior Editor; Sunil Wattal, Associate Editor. Funding: This work was supported by the Social Science and Humanities Research Council of Canada [Insight Development Grant 430-2017-01055]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2023.1206. Collapse

Semantic filters: behavioral economics

Topics: enterprise resource planning digital good website price management digital platform

Methods: experiment Student's t-test survey regression analysis method laboratory experiment

Theories: behavioral economics
The Relationship Between Twitter Sentiment and Stock Performance: A Decision Tree Approach

2023 | HICSS | Citations: 0
Authors: Chen, Rongjuan; Dong, Ruoxi

Abstract: Social media has become a communication tool, but also a valuable database for r ... Expand

Abstract: Social media has become a communication tool, but also a valuable database for researchers and practitioners to gather information, share knowledge, as well as express opinions about stock performance. The sentiment embedded in social media content can be analyzed to predict stock performance. Although numerous past studies have attempted to predict stock price movement using social media sentiment, some emerging analytical tools, like existing lexicons, may require further testing and validation in a financial decision making context. In this study, we develop and test predictive models for stock price and trend forecasting. By using a large-scale sample of tweets collected from Twitter, related to four companies, Apple, Google, Microsoft, and Netflix, we propose a novel decision tree approach to stock performance prediction. Based on our findings, we then provide theoretical and practical implications and discuss the directions for future work. Collapse

Semantic filters: behavioral economics

Topics: Twitter social media decision making digital service Netflix

Methods: sentiment analysis decision tree classification regression analysis method multiple linear regression NLP tool

Theories: behavioral economics
The Cost of Free: The Effects of “Wait-for-Free” Pricing Schemes on the Monetization of Serialized Digital Content

2023 | Management Information Systems Quarterly | Citations: 0
Authors: Choi, Angela; Rhee, Ki-Eun; Yoon, Chamna; Oh, Wonseok

Abstract: Leveraging a combination of analytical frameworks and empirical assessments, th ... Expand

Abstract: Leveraging a combination of analytical frameworks and empirical assessments, this study investigates the effects of wait-for-free (WFF) pricing schemes on the monetization of serialized, digital entertainment content, which has become increasingly pervasive on online platforms. WFF pricing is a strategy in which consumers are given the option to either wait a certain amount of time to acquire digital content at no cost or pay to consume it immediately. We evaluate the extent to which habit formation and presentbiased preferences driven by the consumption of addictive stock affect individual consumers' willingness to wait (or pay) for content, which, in turn, determines the efficacy of WFF pricing. We also examine the conditions under which consumers switch from waiting for free content to instantaneously purchasing content. Our findings indicate that WFF pricing increases the sales of serialized digital content, generating new demand from customers who would otherwise forgo participation in the market. In addition, the pricing design effectively generates sustained profits in the long run. We found that most consumers who initiate a purchase either upon initial market entry or upon switching continue to purchase as new episodes become available. Moreover, the results indicate that as a user accumulates free episodes of a specific series, given extended waiting periods, the likelihood of their conversion from a wait-for-free customer to an instant-purchase customer increases. In particular, WFF pricing effectively augments the willingness to pay of low-valuation consumers as habit formation builds up through time with the free consumption of serialized content. One free episode can elevate the likelihood of consumer purchase by up to 13%. However, as the number of free episodes consumed goes beyond a threshold, the likelihood of conversion decreases. We conclude with a discussion of managerial implications that can help content providers monetize their serialized digital content products. Collapse

Semantic filters: behavioral economics

Topics: price management consumer behavior advertising management digital good customer satisfaction

Methods: mathematical model robustness check econometric modeling proportional hazards model survival analysis

Theories: behavioral economics
The Downside of Displaying Agentic Values: Evidence from Shareholder Activism
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2023 | Organization Science | Citations: 0
Authors: DesJardine, Mark R.; Shi, Wei

Abstract: Activist shareholders face a challenging task in preemptively identifying execut ... Expand

Abstract: Activist shareholders face a challenging task in preemptively identifying executives who they perceive might destroy shareholder value—before harm is done. We develop a framework where activist shareholders resolve this problem by forming attributions about executives’ intentions based on their displays of agentic values, which reflect independence and control. For activist shareholders, a strong display of independence can evoke concerns that an executive will act without the regulation of shareholder input, and a strong display of control can create concerns an executive will engineer governance provisions to their own benefit. As such, we hypothesize that above-average agentic value displays by CEOs increase the likelihood firms are targeted by shareholder activists. Extending our theory, we argue the positive effect that agentic value displays have on attracting shareholder activism is stronger when CEOs permit higher spending on corporate and stakeholder investment, both of which can exacerbate shareholder harm when executed poorly. We also posit that activism campaigns driven by CEOs’ agentic value displays will largely come from activist shareholders seeking to exert their own control over agentic-speaking CEOs. Using data on shareholder activism campaigns at US-based companies from 2003–2018, we find support for our hypotheses. We discuss multiple theoretical implications for research on corporate governance, stakeholder management, and investor relations. Collapse

Semantic filters: behavioral economics

Topics: corporate governance research and development accounting database system Netflix

Methods: descriptive statistic theory development instrumental variables estimation robustness check statistical hypothesis test

Theories: big five model attribution theory behavioral economics
Analyzing Frictions in Generalized Second-Price Auction Markets
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2023 | Information Systems Research | Citations: 0
Authors: Kannan, Karthik; Pamuru, Vandith; Rosokha, Yaroslav

Abstract: We investigate the role of frictions in determining the efficiency and bidding b ... Expand

Abstract: We investigate the role of frictions in determining the efficiency and bidding behavior in a generalized second-price auction—the most preferred mechanism for sponsored-search advertisements. In particular, we take a twofold approach of Q-learning–based computational simulations in conjunction with human-subject experiments. We find that the lower valued advertisers (who do not win the auction) exhibit highly exploratory behavior. Moreover, we find the presence of market frictions moderates this phenomenon and results in higher allocative efficiency. These results have implications for policymakers and auction-platform managers in designing incentives for more efficient auctions. History: Ahmed Abbasi, Senior Editor; Idris Adjerid, Associate Editor. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2022.1187. Collapse

Semantic filters: behavioral economics

Topics: search engine search engine marketing artificial intelligence IS economics economic surplus

Methods: experiment simulation agent based simulation machine learning experimental design

Theories: behavioral economics
Primer for Experimental Methods in Organization Theory
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2023 | Organization Science | Citations: 0
Authors: Levine, Sheen S.; Schilke, Oliver; Kacperczyk, Olenka; Zucker, Lynne G.

Abstract: Experiments have long played a crucial role in various scientific disciplines an ... Expand

Abstract: Experiments have long played a crucial role in various scientific disciplines and have been gaining ground in organization theory, where they add unique value by establishing causality and uncovering theoretical mechanisms. This essay provides an overview of the merits and procedures of the experimental methodology, with an emphasis on its application to organization theory. Drawing on the historical roots of experiments and their impact across science, we argue the method holds immense potential for furthering organization theory. We highlight key advantages of experimental methods, including high internal and construct validity, vividness in communicating findings, the capacity to examine complex and understudied phenomena, and the identification of microfoundations and theoretical mechanisms. We alleviate some concerns about external validity and offer guidance for designing and conducting sound, reproducible experimental research. Ultimately, we contend that the current experimental turn holds the potential to reorient organization theory.History: This paper has been accepted for the Organization Science Special Issue on Experiments in Organizational Theory.Funding: This work was supported by the Otto Moensted Foundation, which granted the Otto Moensted Visiting Professorship to S. S. Levine, and a National Science Foundation CAREER Award from the Directorate for Social, Behavioral and Economic Sciences [Grant 1943688] to O. Schilke.Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2023.18093. Collapse

Semantic filters: behavioral economics

Topics: electronic mail behavioral intention innovation management anonymity social network

Methods: experiment survey statistical hypothesis test post-hoc analysis theory development

Theories: organizational theory behavioral economics
Beyond the First Offer: Decoding Negotiation Openings and Their Impact on Economic and Subjective Outcomes
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2023 | Group Decision and Negotiation | Citations: 0
Authors: Lipp, Wolfram E.; Smolinski, Remigiusz; Kesting, Peter

Abstract: First offers play a significant role in negotiations as they anchor negotiators’ ... Expand

Abstract: First offers play a significant role in negotiations as they anchor negotiators’ perceptions and influence negotiation outcomes in favor of the first-offer proposer. However, negotiation is a joint decision-making process in which a first offer is typically succeeded by a counteroffer. The impact of a counteroffer has not yet been systematically researched. We propose that a counteroffer influences negotiation outcomes like a first offer. In addition, we conceptualize the “anchor zone” as the distance between the first offer and the counteroffer. We theorize that the anchor zone influences negotiation outcomes because it captures additional information compared to a single offer. To test our hypotheses, we conducted two studies: Study 1 was a vignette study (n = 190) in which participants reacted to a counteroffer that they received based on their first offer as part of a simulated negotiation. Study 2 was an online experiment (n = 212) in which participants negotiated by exchanging offers with no further communication. Our analysis suggests that the counteroffer is a significant predictor of economic outcomes. Thus, it works like a first offer, but with a lower impact. In addition, the anchor zone predicted how far the final agreement was from the first offer. Furthermore, we found that the third offer, the average concessions, and the number of offers mediated the effects of the counteroffer and anchor zone on economic outcomes. Finally, we discovered that a more aggressive counteroffer reduced the subjective value of both negotiators. Collapse

Semantic filters: behavioral economics

Topics: Apple iPhone decision making data quality

Methods: experiment statistical hypothesis test simulation statistical power analysis regression analysis method

Theories: behavioral economics
Reshaping Loyalty Programs for Sustainability: Harnessing the Power of Mobile Marketing

2023 | International Conference on Information Systems | Citations: 0
Authors: McRae, Cameron; Dubé, Laurette

Abstract: ... Expand

Abstract: Collapse

Semantic filters: behavioral economics

Topics: marketing management consumer behavior pandemic information system use price management

Methods: regression analysis method econometric modeling archival research

Theories: behavioral economics
Domain-independent real-time service provisioning in digital platforms: Featuring bundling and customer time-preference
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2023 | Decision Support Systems | Citations: 0
Authors: Mukherjee, Anik; Rangaraja P., Sundarraj; Vander Meer, Debra; Dutta, Kaushik

Abstract: Digital platforms have emerged as an important technology underpinning the new e ... Expand

Abstract: Digital platforms have emerged as an important technology underpinning the new economy. A key problem in such platforms concerns provisioning decisions for customer-service requests, in order to maximize the pro vider’s revenue subject to resource availability. Provisioning is important to meet customer needs, and in turn, for customer retention. The service provisioning problem, in addition to being NP-hard, is further compounded by the fact that the timeframe to make provisioning decisions is short, and more importantly, varies considerably across different platform domains. Digital-platform customers often request bundled services and are sensitive to when tasks get completed. We describe a behavioral-economic model of this problem and develop a domainindependent solution featuring a judicious combination of optimization-backed rule-based approach. Through extensive computational results, we show how our approach has the potential for generalizability and tailor ability across different domains in a seamless manner, thus offering the advantages proposed in the softwarereusability literature. Implications to platform sustainability, reusable platform solutions and to practical ap proaches to real-time platforms are also provided. Collapse

Semantic filters: behavioral economics

Topics: digital platform decision making cloud computing ride sharing platform smartphone

Methods: experiment computational algorithm knapsack problem association rule learning simulation

Theories: behavioral economics
The Birth of AI-driven Nudges

2023 | HICSS | Citations: 0
Authors: Nyman, Stig

Abstract: AI methods allow for a multitude of new forms of managerial control. One is algo ... Expand

Abstract: AI methods allow for a multitude of new forms of managerial control. One is algorithmic nudging, in which organizations use AI methods to control workers through targeted recommendations. Drawing upon Michel Foucault’s analytical strategies, the paper examines the intellectual heritage and ideological roots of AI-nudges. Scholars have commented on the resemblance between algorithmic nudging and Taylorist scientific management. However, as this paper shows the discourse of AI-nudges also shares significant linages with other subsequent opposing managerial paradigms. Building on the analysis of AI-nudges linages, the paper discusses how their use implies three contestable presumptions 1) that work can be codified, 2) that workers require autonomy over their work, and 3) that there is no existing conflict of interest between workers and the organization. Collapse

Semantic filters: behavioral economics

Topics: artificial intelligence decision making organizational culture datafication recommender system

Methods: computational algorithm

Theories: nudge theory behavioral economics

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Found 158 articles

All External Reference Prices Are Not the Same: How Magnitude, Source, and Fairness Shape Payment for Digital Goods

The Relationship Between Twitter Sentiment and Stock Performance: A Decision Tree Approach

The Cost of Free: The Effects of “Wait-for-Free” Pricing Schemes on the Monetization of Serialized Digital Content

The Downside of Displaying Agentic Values: Evidence from Shareholder Activism

Analyzing Frictions in Generalized Second-Price Auction Markets

Primer for Experimental Methods in Organization Theory

Beyond the First Offer: Decoding Negotiation Openings and Their Impact on Economic and Subjective Outcomes

Reshaping Loyalty Programs for Sustainability: Harnessing the Power of Mobile Marketing

Domain-independent real-time service provisioning in digital platforms: Featuring bundling and customer time-preference

The Birth of AI-driven Nudges