• Selected
• Entire List

Abstract:
This paper quantifies the effect of state privacy regulation on the diffusion of Electronic Medical Records (EMR). EMR allow medical providers to store and exchange patient information using computers rather than paper records. Hospitals may be more likely to adopt EMR if they can reassure patients that their confidentiality is legally protected. Alternatively, privacy protection may inhibit adoption if hospitals cannot benefit from easily exchanging patient information. We find that state privacy regulation restricting hospital release of health information reduces aggregate EMR adoption by hospitals by more than 24%. We present evidence that suggests that this is due to the suppression of network externalities.

Technology Diffusion, Privacy Protection, Health-care IT, Network Externalities, Hospitals

Abstract:
Popularity information is usually thought to reinforce existing sales trends by encouraging customers to flock to mainstream products. We propose an opposite hypothesis: popularity information may benefit niche products disproportionately, because the same level of popularity implies higher quality for a niche product than for a mainstream product. We examine this hypothesis empirically using field experiment data from a web site that lists wedding service vendors. Consistent with our hypothesis, we find that popular niche vendors receive more visits than popular mainstream vendors, across several definitions of niche.

Popularity Information, Observational Learning, Niche Marketing, Long Tail, Internet Marketing, Field Experiment

Abstract:
Each search term put into a search engine produces a separate set of results. Correspondingly, each of the sets of ads displayed alongside these results is priced using a separate auction. There is growing debate whether this marketing strategy merely makes advertising more informative, or whether using context to price also effectively price discriminates. To inform this debate, we examine advertising prices paid by lawyers for 174 Google search terms in 195 locations and exploit a natural experiment in "ambulance-chaser" regulations across states. Where state laws impose limits on lawyers' contingency fees limits, the relative price of advertising is $2.27 lower. This suggests that context-based pricing allows prices to reflect heterogeneity in the profitability of customer leads. When lawyers cannot contact a client by mail, the relative price per ad click is $0.93 higher. This suggests that context-based pricing allows prices to reflect heterogeneity in advertisers' other advertising options, even within a given local market. This last result emphasizes that search engine's pricing clout depends on the extent of competition, both online and offline.

search engines, advertising, market power, advertising prices

Abstract:
This paper analyzes the role of individual heterogeneity in the diffusion of a network technology. Using a detailed data set on the adoption of a new videoconferencing technology within a firm, we estimate a structural model of technology adoption and use. We find that employees have significant heterogeneity in both adoption costs and network benefits, and have preferences for diverse networks. Using our estimates, we evaluate two counterfactual adoption policies, and find that a policy of strategically targeting a subtype for initial adoption can lead to a faster-growing and larger network than a policy of uncoordinated or diffuse adoption.

Dynamics, Heterogeneity, Diffusion, Network Goods, Communication Technologies, Network Effects

Abstract:
The US has a higher infant mortality rate than most other developed nations. Electronic medical records (EMR) and other healthcare information technology (IT) improvements could reduce that rate, by standardizing treatment options and improving monitoring. We empirically quantify how healthcare IT improves neonatal outcomes. We identify this effect through variations in state medical privacy laws that distort the usefulness of healthcare IT. We find that adoption of healthcare IT by one additional hospital in a county reduces infant mortality in that county by 13 deaths per 100,000 live births. Rough cost-effectiveness calculations suggest that healthcare IT is associated with a cost of $450,140 per infant saved.

healthcare IT, Electronic medical records

Abstract:
The US has a higher infant mortality rate than most other developed nations. Electronic medical records (EMR) and other healthcare information technology (IT) improvements could reduce that rate, by standardizing treatment options and improving monitoring. We empirically quantify how healthcare IT improves neonatal outcomes. We identify this effect through variations in state medical privacy laws that distort the usefulness of healthcare IT. We find that adoption of healthcare IT by one additional hospital in a county reduces infant mortality in that county by 13 deaths per 100,000 live births. Rough cost-effectiveness calculations suggest that healthcare IT is associated with a cost of $450,140 per infant saved.

Healthcare IT, Infant Mortality, Hospital Quality, Technology Diffusion, Privacy Protection

Abstract:
Firms introducing network technologies (whose benefits depend on who installs the technology) need to understand which user characteristics confer the greatest network benefits on other potential adopters. To examine which adopter characteristics matter, I use the introduction of a video-messaging technology in an investment bank. I use data on its 2,118 employees, their adoption decisions and their 2.4 million subsequent calls. The video-messaging technology can also be used to watch TV. Exogenous shocks to the benefits of watching TV are used to identify the causal (network) externality of one individual user's adoption on others' adoption decisions. I allow this network externality to vary in size with a variety of measures of informal and formal influence. I find that adoption by either managers or workers in boundary spanner positions has a large impact on the adoption decisions of employees who wish to communicate with them. Adoption by ordinary workers has a negligible impact. This suggests that firms should target those who derive their informal influence from occupying key boundary-spanning positions in communication networks, in addition to those with sources of formal influence, when launching a new network technology.

Networks, Network Externalities, Technology Management

Abstract:
Many firms have introduced internet-based customer self-service applications, such as online payments or brokerage services. Despite high signup rates, these services have generally been unsuccessful in convincing customers to move most of their dealings with the firm online; few customers use them consistently. We investigate whether the multi-stage nature of the adoption process (an `adoption funnel') for such technologies can explain this low take-up. We use exogenous variation in delays in the adoption process, caused by vacations and public holidays in different German states, to identify the effect of being delayed in early stages of the adoption process on ultimate adoption. We find that delays in earlier stages of the adoption process reduce a customer's probability of moving to consistent usage. Our results suggest significant cost-saving opportunities from reducing delays in the adoption funnel.

Online Banking, Technology Adoption, Adoption Process, Adoption Funnel, Online Security, Self-Service Technology

Abstract:
When a multi-channel retailer opens its first retail store in a state, the firm is obligated to collect sales taxes on all Internet and catalog orders shipped to that state. In this paper, we assess how opening a store affects Internet and catalog demand. We analyze purchase behavior among customers who live far from the retail store but who are obligated to pay sales taxes on catalog and Internet purchases. A comparable group of customers in a neighboring state serves as a control. We show that Internet sales decrease significantly, but catalog sales are unaffected. Further investigation indicates that the difference in these outcomes is partly attributable to the ease with which customers can search for lower prices at competing retailers. We extend the analysis to a panel of multi-channel firms and show that retailers who earn a large proportion of their revenue from direct channels avoid opening a first store in high-tax states. We conclude that current U.S. sales taxes laws have significant effects on both customer and firm behavior.

Sales Taxes

Abstract:
This paper investigates how the stability of a communications network affects the scope of network effects, or how many people in an installed base influence other people's adoption.

The paper uses data on the adoption and use of a firm's internal video-calling system. The firm's New York office had to be relocated due to the terrorist attacks in 2001, which led to a physical reorganization of the teams in New York but not in other comparable cities. The shock led New York employees to call a more varied set of contacts, and also increased the number of people whose adoption influenced potential adopters. Empirical analysis suggests that for New York employees, whose communications network had become less stable as a result of the attacks, the effect of network effects on adoption was doubled.

Network Effects, Social Networks, Stability

Abstract:
After firms adopt electronic information and communication technologies, their decision-making leaves a trail of electronic information. We ask how the threat of litigation affects decisions to adopt technologies that leave more of an electronic trail, such as electronic medical records (EMRs). EMRs allow hospitals to document electronically both patient symptoms and health providers' reactions to those symptoms. We find evidence that hospitals are a third less likely to adopt electronic medical records if there are state laws that facilitate the use of electronic records in court.

healthcare IT, electronic discovery, technology adoption, medical malpractice

Abstract:
We examine empirically whether the size of a firm using a network affects the scope of its network usage, and consequently network effects and lock-in within the network. We use the example of hospital information exchange. We find that hospitals in larger hospital systems are more likely to exchange electronic patient information only within their system and less likely to exchange patient information externally. We show that hospitals are also more likely to exchange information externally if others hospitals also do so. This implies that the disinclination of large hospital systems to exchange data externally harms overall levels of network use. Our results highlight that makers of technology policy designed to encourage the optimal use of networks should consider regulating the behavior of network users as well as technology vendors.

network effects, healthcare IT, hospital competition

Abstract:
In April 2006, the real estate listing service in Massachusetts adopted a new policy that prohibits home sellers from resetting their property’s “days on market” to zero through relisting. We study the effect of this new policy on single-family home sales along the Massachusetts-Rhode Island border, using homes in Rhode Island, which did not change its policy, as the control group. We find that the policy change leads to a relative sale price reduction of around $11,000 for affected homes in Massachusetts. Homes caught in the middle of the policy change are the hardest hit; the sudden release of the cumulative days on market information lowers the average sale price by $21,500. Sellers respond to the new policy by reducing the listing price to shorten their property’s days on market.