Understanding the process of software adoption is of paramount importance to software start-ups. We study a monopolistic seller’s optimal consumer network structure formation (seeding, segmentation, sequencing, and pricing strategies) under network effects. We demonstrate the importance of...

The advance selling strategy is implemented when a firm offers consumers the opportunity to order its product in advance of the regular selling season. Advance selling reduces uncertainty for both the firm and the buyer and enables the firm to update its forecast of future demand. The...

This paper studies the competition between firms for influencers in a network. Firms spend effort to convince influencers to recommend their products. The analysis identifies the offensive and defensive roles of spending on influencers. The value of an influencer only depends on the in-degree...

We model consumer social networks as information collection media and examine two major issues: first, how consumers construct product fit signals based on product feedbacks collected from their social connections to assist with their purchase decisions, and second, how a retailer can benefit...

Public “Beta” launches have become a preferred route of entry into the markets for new software products and web site based services. While beta testing of novel products is nothing new, typically such tests were done by experts within firm boundaries. What makes public beta testing so...

This paper examines the effect of recommender systems on the diversity of sales. Two anecdotal views exist about such effects. Some believe recommenders help consumers discover new products and thus increase sales diversity. Others believe recommenders only reinforce the popularity of already...

The phenomenon of sponsored search advertising where advertisers pay a fee to Internet search engines to be displayed alongside organic (non-sponsored) web search results is gaining ground as the largest source of revenues for search engines. Using a unique panel dataset of several hundred...

We use variation in wind speeds at surfing locations in Switzerland as exogenous shifters of users' propensity to post content about their surfing activity onto an online social network. We exploit this variation to test whether users' social ties on the network have a causal effect on their...

This paper proposes methods for identifying indirect network effects with dynamically optimizing consumers purchasing a durable hardware good and associated software. We apply this model to data drawn from the DVD player and titles markets. We observe model-level prices, sales and...

Online applications and services automate communications and transactions between firms and consumers, promising large efficiency gains. However, consumers have been slow to use these online technologies intensively, despite widespread adoption of the internet. Customers frequently undergo a...