Announcing the Sixth Workshop on Information System Design and Economic Behavior (ISDEB 2021)
Date: 15th to 17th March 2021
Time: Each day one presentation between 4:30 – 6:00 PM (UTC+1)
Location: Given Covid-19, ISDEB 2021 will be held online.
Scope & Workshop Format: The ISDEB workshop is designed to provide a community for researchers who focus on economic principles of IS design. Although a number of workshops and conferences accept research in this area, these tend to be diffused with inadequate time for presentation, discussion and Q&A. The ISDEB workshop complements such venues by providing a focused and intense environment for interaction among researchers to assist in the development of the field. ISDEB workshops have a single track with one hour per paper so everyone can participate substantively in the discussion. (read more)
Registration: To register for the workshop, please use this Link. The workshop is free of charge.
Date and Time: Monday, March 15, 16:30 – 18:00 (UTC+1)
Presenter: Jens Förderer, Technical University Munich
Title: Does Consumer Privacy Harm Innovation? – Evidence from Google’s Enforcement of COPPA in Android’s Market for Kids-Games
Abstract: The increasing awareness of privacy has created a new decision problem for platform firms: should they encourage privacy on their platforms? While privacy fosters user adoption, it potentially harms complementary innovation. Little is known about the actual consequences of privacy on innovation so far. Our paper seeks to add robust empirical evidence to this discussion by studying the effects of privacy on complementors’ innovation behavior. We study Google’s complaint-induced strict enforcement of COPPA in Android’s market for kids-games that manifested in a policy-change. The policy-change restricted app developers’ collection of data as well as targeted advertising if their apps have a children audience. We identify the effect of privacy in a difference-in-differences-in-differences analysis (DiDiD), exploiting variation in content ratings. We identify affected developers if at least one of their games can be accessed by children and compare affected developers’ games just forced to comply (content rating 10+) to control games just not forced to comply (content rating 13+). We make three findings. First, we find that privacy reduced innovation. Second, we find developers to relocate innovation efforts and data collection. Third, developers raise prices. This study advances our understanding of privacy as a platform governance instrument and adds empirical evidence to the debate on the relationship of privacy and innovation.
Date and Time: Tuesday, March 16, 16:30 – 18:00 (UTC+1)
Presenter: Hooman Hidaji, University of Calgary
Title: Provider Output and Downstream Firms’ Service Tier Choice
Abstract: For information and communications technology (ICT) providers, one of the main decisions is output: the menu of service tiers (quality, features, security, and/or reliability) and their corresponding cost to clients. Client firms, on the other hand, need to choose a given service tier from this menu. We study the impact of a monopolist provider’s output on the chosen service tier and profit of downstream firms in a duopoly competition as well as on customers using a general analytical model. We find that whereas in the case of independent firm demands, a higher provider output is desirable, this is not necessarily the case if firms exert an externality on each other. Specifically, a firm’s profit decreases with provider output if firms have a large positive externality (i.e. their demands are complements), as it may drive them to a sub-optimal equilibrium and reduce their profits. Moreover, if externality is low (competing firms), even though customers and firms benefit from improved provider output, the provider suppresses its output as it has no incentive to increase it. Our findings are contrary to the common wisdom and academic literature on provider output and quality, where higher output is always desirable, and have important implications for policy makers at the provider level to alleviate the misalignment of incentives among providers and firms.
Date and Time: Wednesday, March 17, 16:30 – 18:00 (UTC+1)
Presenter: Dennis Kundisch, Paderborn University
Title: The Fate of the App: Economic Implications of Updating under Reputation Resetting
Abstract: Online reviews on digital platforms are essential in building reputation. Existing reviews, however, become less informative for products whose attributes change over time. Digital platforms have explored reputation update mechanisms that adequately reflect this change. One such distinctive mechanism in the context of apps is that reputation, and thus the underlying review history, is reset with the release of a new app update. While this reputation resetting mechanism might have been intended to ensure that an app’s reputation always reflects its current characteristics, it results in complete loss of app reputation irrespective of its prior quality. The implications of this loss of reputation on app market performance remains unknown. This is further complicated by settings where app updating and thus reputation resetting may be required by the hosting platform in compliance with its release of a new operating system. Exploiting an instrumental variable approach on a panel dataset from Apple App Store, we find that when reputation resetting is platform-driven, the effects are asymmetrical across reputation levels. Apps with low prior reputation enjoy a sharp increase in demand while those with high prior reputation experience a sharp decline in demand. Further, our results indicate that the effects on high prior reputation apps are longer-lived than those on low prior reputation apps. Interestingly, for developer-driven updates we find symmetrical effects. Hence, our results reveal that the reputation mechanism arguably designed to ensure accurate reputation has benefits but also substantial drawbacks, specifically for the platform’s best performing apps.
- Dominik Gutt (Erasmus University Rotterdam)
- Alexander Kupfer (University of Innsbruck)
- Steffen Zimmermann (Ulm University)
This workshop is organized in cooperation with the Department „Economics of IS“ of the journal „Business & Information Systems Engineering (BISE)“.
Bildquelle: Universität Duisburg-Essen, Bildarchiv