When using digital goods that extensively collect user information, privacy uncertainty, which is consumers' difficulty in assessing the privacy of the data they entrust to others, is a major concern. We extend the existing literature on uncertainty in online marketplaces by incorporating privacy uncertainty, and we distinguish among three subdimensions of privacy uncertainty-namely collection, use, and protection. We subsequently theorize and empirically test the antecedents and consequences of this new construct in the context of mobile apps. Consistent with economic theory, we argue that because consumers possess less information than the app seller as a result of the presence of hidden characteristics and hidden action, privacy uncertainty is evoked. Using the factorial survey method, we test our theoretical model in the context of buying a mobile app. The results show that privacy uncertainty significantly influences potential users' intention to use an app above and beyond their uncertainty about the seller and the product. Privacy uncertainty also affects the perceived risk associated with using an app and the price consumers are willing to pay for it. In addition, we find that privacy uncertainty is driven by the uncertainty about privacy practices in regard to the collection, use, and protection of data collected at the time of downloading the app-and more important, the data collected while the app is being used. The results of another factorial survey study suggest that privacy uncertainty is distinct from seller and product uncertainties and has unique drivers. The results of a survey of current users of existing mobile apps indicate that the effects of privacy uncertainty extend to the postadoption stage, where it remains a strong influencer of continued use intentions and perceived risk.
Al-Natour, S., et al. (2020). "An Empirical Investigation of the Antecedents and Consequences of Privacy Uncertainty in the Context of Mobile Apps." Information Systems Research 31(4): 1037-1063.
Business intelligence and analytics (BI&A) systems enable firms to analyze data and search for insights that could potentially lead to improved organizational performance. While there is evidence that BI&A systems can improve performance through search, our theoretical understanding of how and under what conditions firms leverage BI&A systems to conduct search is rather limited. In particular, while problemistic search theory posits that performance failures motivate search, how firms respond to different types of performance failures remains unclear. We draw on and extend problemistic search theory by theorizing that BI&A-enabled search is influenced by complex interactions between failures in financial and operational performance and performance-related aspirations. We refer to this notion as the Theory of Performance-driven Search (TPS) and test it using longitudinal data gathered for a four-year period from seven U.S. hospitals. We find evidence that firms employ BI&A systems to search in a narrow set of circumstances. We find that performance failures are an important antecedent of BI&A-enabled search. In particular, failures in financial performance, failures in operational performance, and their joint failures are important conditions that trigger BI&A-enabled search. We find that historical and social aspiration levels of financial and operational performance influence BI&A-enabled search during failures in operational performance. We also find that only in organizations experiencing a sustained failure in financial performance do operational performance failures trigger BI&A-enabled search and that the latency of search response is dependent on the speed of failure in financial performance. Through our findings, we make two important contributions: we extend the business value of IT literature by identifying the contextual conditions that trigger BI&A use for search and we extend problemistic search theory by theorizing for the differential effects of operational and financial performance failures.
Anand, A., et al. (2020). "The Effects of Operational and Financial Performance Failure on BI&A-Enabled Search Behaviors: A Theory of Performance-Driven Search." Information Systems Research 31(4): 1144-1163.
This study investigates the impact of daily deals on local retailers' (restaurants') online ratings. We collected and utilized a comprehensive panel data set that combines information on restaurants' deal offerings (Groupon or LivingSocial) with their Yelp review details. Although demonstrating a negative main effect of daily deals on a restaurant's monthly average ratings, we worked to uncover the underlying mechanisms by focusing on the mediating role of consumers' postconsumption perception. Our mediation analyses show that daily deals are associated with the reduction of both consumers' perceived food quality and perceived service quality as revealed in review texts, which leads to subsequent declines in a restaurant's online ratings. We further noted and studied two types of reviews that existed during the deal-redemption period: (1) reviews that mentioned daily deals (DD Reviews) and (2) reviews that did not mention daily deals (NDD Reviews). NDD Reviews are usually from regular customers, whereas DD Reviews are likely from a different base of customers, deal users. Our separate analyses demonstrate differential mediation processes between DD Reviews and NDD Reviews. For DD Reviews, both perceived food and service quality had mediation roles, suggesting a mismatch effect. That is, daily deals attract discount-focused consumers, including new customers, who are less likely to appreciate the food or service and, therefore, leave a negative review. In contrast, for NDD Reviews, only perceived service quality had a mediation role, suggesting a negative externality effect. That is, the large volume of deal redemptions by deal users may induce a longer waiting time (to be seated and/or served) and, thus, reduced perceived service quality for regular customers. These results deepen our understanding of the impact of daily deals on business online reputation and provide important practical guidance to both local retailers and daily deal platforms.
Bai, X., et al. (2020). "A Note on the Impact of Daily Deals on Local Retailers' Online Reputation: Mediation Effects of the Consumer Experience." Information Systems Research 31(4): 1132-1143.
Using the French antipiracy law known as HADOPI as a natural experiment, we study the asymmetric effects of online piracy on cinema admissions. Applying four estimation strategies at different levels of observation (town, movie, country, and consumer), we find that the introduction of the law is associated with a 9% increase in the market share of American movies. This increase occurs at the expense of other movies. Although we find an increase in overall admissions, this effect is not statistically significant. These findings primarily originate from a high initial level of asymmetric piracy between American and other movies, which was attenuated by the antipiracy law, resulting in a fiercer competition between movies. The results can also be explained by the behavior of younger consumers and might be caused by consumers' budget or time constraints. We exclude positive shocks on the relative quality of American movies, the advent of three-dimensional movies, supply-side reactions by firms, and word-of-mouth effects of illegal downloads as explanations for this redistributive effect.
Bellego, C. and R. De Nijs (2020). "The Unintended Consequences of Antipiracy Laws on Markets with Asymmetric Piracy: The Case of the French Movie Industry." Information Systems Research 31(4): 1064-1086.
In this paper, we draw from research in the information systems security and management fields to theorize that a firm's social performance, as measured by its engagement in socially responsible (or irresponsible) activities (i.e., corporate social performance (CSP)), affects its likelihood of being subject to computer attacks that result in data breaches. Drawing from stakeholder theory and positioning employees and external hackers as key stakeholders of the firm with respect to information security, we propose a set of hypotheses that elaborate relationships between aspects of a firm's CSP and the likelihood of experiencing a data breach. To test our hypotheses, we compiled a unique data set that consists of publicly available data on firms' data breach incidents, external assessments of their CSP, and other firm-specific factors. Our contribution is an intriguing and previously unknown account of CSP as it relates to information security. Paradoxically, our results suggest that firms that are noted to have poor CSP records (i.e., CSP concerns) are no more likely to experience a data breach, although a positive CSP record (i.e., CSP strengths) in areas that are peripheral to core firm activities (e.g., philanthropy, recycling programs) results in an elevated likelihood of breach. Delving into this latter finding, our results suggest that firms that simultaneously have peripheral CSP strengths along with high CSP concerns in other areas are at increased risk of breach. The increased likelihood of breach for firms with seemingly disingenuous CSP records suggests that perceived "greenwashing" efforts that attempt to mask poor social performance make firms attractive targets for security exploitation.
D'Arcy, J., et al. (2020). "Too Good to Be True: Firm Social Performance and the Risk of Data Breach." Information Systems Research 31(4): 1200-1223.
We analyze the outcomes of two randomized field experiments to study the effect of binge-watching on subscription to video on demand. In both cases, we offered access to subscription VoD (SVoD) to a random set of households for several weeks and used another random set of households as a control group. In both cases, we find that the households that binge-watch TV shows are less likely to pay for SVoD after these free trials. Our results suggest that binge-watchers deplete the content of interest to them very quickly, which reduces their short-term willingness to pay for SVoD. We also show that recommendation reminders aimed at widening the content preferences of households offset the negative effect of binge-watching and lessen the concerns of binge-watchers with lack of content refresh. We discuss that these recommendation reminders may help content providers manage supply costs, which may otherwise become prohibitive with frequent updates to SVoD catalogs.
de Matos, M. G. and P. Ferreira (2020). "The Effect of Binge-Watching on the Subscription of Video on Demand: Results from Randomized Experiments." Information Systems Research 31(4): 1337-1360.
We examine content creation in a geosegmented, crowdsourced social mobile virtual community app, Waze. We conceptualize a virtual and spatial factor, virtual crowdedness (defined as the density of Waze users in a particular geospatial location), and we examine its role in encouraging user contribution. We posit that the relationship between virtual crowdedness and user contribution is driven by the tension between audience effects and bystander/content saturation effects. We analyze a panel data set of user contributions on Waze from New York City to test our hypotheses. First, our findings indicate that although virtual crowdedness has a positive influence on total number of contributions, the magnitude of the influence decreases as virtual crowdedness increases. Second, the concave-down increasing relationship is more pronounced for rush hours with high physical crowdedness than for non-rush hours with low physical crowdedness. A variety of robustness checks and alternative analyses based on matching estimators and spatial econometric models further support the main conclusions while mitigating concerns about endogeneity and spatial autocorrelation. Our findings provide several key practical implications for platform designers in that they should allow for users to visualize density of usage as well as improve the design of social features for encouraging user contribution to the mobile virtual community.
Guo, C. H., et al. (2020). "Understanding Content Contribution Behavior in a Geosegmented Mobile Virtual Community: The Context of Waze." Information Systems Research 31(4): 1398-1420.
Online marketplaces thrive by offering products from a wide array of third-party stores. One major decision faced by the owners of online marketplaces is whether they should enter into the market and sell products directly to customers. Although a few game-theoretical models have addressed this issue, there is still no empirical research to guide the decisions of managers. To fill this gap, this paper empirically investigates the impact of a platform owner's entry on the demand of third-party stores, as well as their potential reactions, using data from a Chinese e-commerce platform that supports both online and offline transactions. We establish several important findings. First, we find that the offline demand of competing third-party stores decreases with the entry of the platform, whereas their online demand does not change significantly. Second, we systematically investigate three potential mechanisms underlying the effects of platform entry in the online and offline channels: the competition effect, the spillover effect, and the disintermediation effect. We show that the decreased offline demand results from third-party stores' defensive strategy to divert their offline customers away from the platform (i.e., disintermediation) rather than from the defection of customers under competition. Third, in contrast to the prior finding from mobile app platforms, we find that the demand of larger third-party stores decreases more with the entry of the platform, suggesting that the effect of platform entry is context dependent. Our study suggests that, while making entry decisions, platform owners should consider the nature of their marketplaces (i.e., whether the competition among sellers is exclusive) and the potential reactions from third-party sellers.
He, S., et al. (2020). "Impact of Platform Owner's Entry on Third-Party Stores." Information Systems Research 31(4): 1467-1484.
This research studies the performance of geofencing, a practice where mobile users are targeted within a predefined virtual geographic boundary around an advertiser's establishment. We argue the significance of distance (i.e., the mileage from a consumer to a focal establishment) and local competition (i.e., the number of alternatives in consumer vicinity) in ad responses. Drawing on the notion of the purchase funnel, we develop a two-stage hierarchical Bayesian model to examine consumer click and conversion choices. A unique data set of geofencing ad impressions is collected from one of the largest location-based marketing agencies in the United States. The results suggest that local competition matters in the click stage, whereas distance influences the propensity of conversion. Quantitatively, one additional competitor in the consumer vicinity zone lowers the click-through rate by 1.03%, whereas a 1-mile increase in distance results in a 17.64% decrease in the conversion rate. We also find a significant interactive effect, whereby a higher degree of local competition amplifies the negative impact of distance on the likelihood of conversions. Additionally, product differentiation ameliorates the effects of distance and local competition, whereas these effects are found to be more prominent during office working hours. This study discovers the stage-varying roles of distance and local competition along the customer journey and offers new directions for more effective location-based targeting.
Ho, Y. J., et al. (2020). "Distance and Local Competition in Mobile Geofencing." Information Systems Research 31(4): 1421-1442.
User-generated online reviews are crucial for consumer decision making but suffer from underprovision, quality degradation, and imbalances across products. This research investigates whether friend contributions cues, in the form of highlighted reviews written by online friends, can motivate users to write more and higher-quality reviews. Noting the public-good nature of online reviews, we draw on theories of pure altruism and competitive altruism to understand the effects of friend-contribution cues on review provision. We test our hypotheses using data from Yelp and find positive effects of friend-contribution cues. Users are three times more likely to provide a review after a recent friend review than after a recent stranger review, and this effect cannot be solely explained by homophily. Furthermore, reviews written after a friend's review tend to be of higher quality, longer, and more novel. In addition, friend reviews tend to have a stronger effect on less-experienced users and less-reviewed products/services, suggesting friend-contribution cues can help mitigate the scarcity of contributions on long tail products and from infrequent contributors. Our findings hold important implications for research and practice in the private provision of online reviews.
Ke, Z. H., et al. (2020). "Do Online Friends Bring Out the Best in Us? The Effect of Friend Contributions on Online Review Provision." Information Systems Research 31(4): 1322-1336.
Human capital is a key component of the knowledge economy that firms compete for in the labor market. Compared with the product market competition, the identification and prediction of labor market competitors have garnered little attention in the literature. In this study, we perform an interfirm labor market competitor analysis with a unique longitudinal employer-employee matched data set derived from online profiles of 89,943 employees, tracking their careers in 3,467 public firms from the years 2000 to 2014. Using employee migrations across firms, we derive and analyze a human capital flow network. We leverage this network to extract global cues about interfirm human capital overlap through structural equivalence and community classification. The online employee profiles also provide rich data on the explicit knowledge base of firms. In particular, they allow us to represent firms in the space of the skills possessed by their employees and measure the interfirm human capital overlap in terms of similarity in their employees' skills. We validate our proposed human capital overlap metrics in a predictive analytics framework using future employee migrations as an indicator of labor market competition. The results show that our proposed metrics have superior predictive power over conventional firm-level economic and human resource measures. We also demonstrate how our proposed metrics and the prediction framework can be incorporated into a comprehensive competitor analysis that includes both product and labor overlap between firms.
Liu, Y. Y., et al. (2020). "Predicting Labor Market Competition: Leveraging Interfirm Network and Employee Skills." Information Systems Research 31(4): 1443-1466.
Daily deals platforms have emerged as an integral part of the marketing mix for retailers and have enjoyed a wide acceptance among consumers. However, there is considerable ambiguity about the effects of deals on brand evaluations, in particular, the effects on preconsumption brand evaluations. This ambiguity can influence the decisions by retailers to join daily deals platforms, which operate as double-sided networked markets. We perform a series of laboratory experiments to test the effect of offering a deal in these platforms on consumers' preconsumption brand evaluations. Our research shows that brand evaluations are contingent on retailer characteristics (price segment and age), customarily reported deal-performance statistics (number of views and purchases of the focal deal), and competitive deal intensity. Furthermore, the paper finds that the effect of daily deals on brand evaluation differs substantially from that associated with regular print coupons, which operate without the benefits of a platform-based model. Finally, local competition from deals in the platform is shown to have a significant negative spillover effect on neighboring retailers who do not offer deals. Our work thus informs retailers considering joining deals platforms about potential costs associated with such a decision, while also providing insights for platform owners on how they may help mitigate some of these losses in brand value for members of their ecosystem. Our research thus provides for a fuller and more nuanced evaluation of daily deals' effects on brand evaluations.
Mejia, J., et al. (2020). "Deal or No Deal? Online Deals, Retailer Heterogeneity, and Brand Evaluations in a Competitive Environment." Information Systems Research 31(4): 1087-1106.
Despite the prolitcratiun of studies on sales distributions in e-commerce, little is known about how such a distribution in online markets is affected by the presence of mobile channels, which have become a significant conduit for e-commerce. Using a large transaction data set from a leading e-marketplace in South Korea, this study empirically investigates (1) how the sales distribution in the mobile commerce channel is different from the sales distribution in the traditional personal computer (PC) channel and (2) how mobile commerce channel adoption (as a search and purchase channel) affects e-market users' search intensity and their aggregate sales distribution. Our analysis in comparing the sales distributions between the PC and mobile channels shows that transactions in the mobile channel are more concentrated on "head" products compared with PC channel sales. The subsequent user-level analysis, based on a difference-in-differences approach, reveals that mobile channel adopters search more but are less (more) likely to choose "tail" (head) products. This finding is contrary to our previous belief that more search activities lead to more tail product sales. The relationship between search intensity and head (tail) product sales, however, largely depends on the product categories. In the case of preference goods such as books, CDs, toys, and fashion items, adoption increased e-market users' search activities and resulted in more tail product sales. For quality goods such as PCs, phones, cameras, and digital appliances, however, adoption intensified the search activities but resulted in more head product sales. Finally, for convenience goods such as home supplies and processed foods, adoption discouraged search activities and decreased the choice of tail products. We discuss the theoretical implications of our findings.
Park, Y., et al. (2020). "How Does the Mobile Channel Reshape the Sales Distribution in E-Commerce?" Information Systems Research 31(4): 1164-1182.
Due to digitization, new mechanisms have emerged for achieving organizational ambidexterity, defined as the ability to pursue both efficiency and flexibility while balancing exploitation and exploration. This study investigates the role of digitization in achieving organizational structural ambidexterity by undertaking both exploitation and exploration simultaneously. Given the complex interdependencies between digitization and multiple intrafirm and interfirm factors in practice, this study adopts a configurational theory perspective. We posit that ambidexterity is better explained as an outcome of aligning digitization with several intrafirm and interfirm factors, rather than of any individual factors in isolation. We empirically derive configurations for achieving ambidexterity by applying fuzzy-set qualitative comparative analysis to 1,325 Canadian firms that invested in new information technology system implementation. The results reveal the mechanisms in which digitization plays a multifaceted role in achieving ambidexterity. Notably, the mechanisms differ among intrafirm-oriented configurations and interfirm strategic alliance configurations, and among large firms and small firms. In the intrafirm solution, digitization and centralization are essential for achieving ambidexterity, with other factors being peripheral; however, in the interfirm solution, digitization plays a peripheral, and even a counterproductive role, in achieving ambidexterity. Particularly, intrafirm collaboration is a necessary condition in both the intrafirm and interfirm solutions for achieving ambidexterity. Interestingly, the results also suggest that small firms seeking ambidexterity require a high level of digitization only while pursuing an intrafirm (but not for an interfirm) solution, whereas large firms require a high level of digitization for both intrafirm and interfirm solutions. New insights and implications for theory and practice for achieving organizational ambidexterity with digitization are discussed.
Park, Y., et al. (2020). "Configurations for Achieving Organizational Ambidexterity with Digitization." Information Systems Research 31(4): 1376-1397.
Many online platforms, such as review communities, rely on crowds' voluntary altruistic contributions. Some platforms attempt to provide financial incentives to encourage users to contribute. Although past studies have demonstrated that monetary rewards can negatively affect individuals' incentivized contributions, little is known about whether this effect spills over into individuals' subsequent unincentivized prosocial activities. Our paper aims to bridge this gap by studying the potential spillover effect of financial incentives on subsequent prosocial contributions based on self-determination theory. Specifically, we conduct empirical analyses of a large Amazon review data set and use machine learning methods to identify reviewers who have received financial incentives. The econometric analyses show that the receipt of financial incentives has a significant spillover effect on reviewers' subsequent unincentivized reviews, which tend to have a more positive sentiment, and the reviewers tend to reduce the review length and exert less linguistic effort in writing them. We conduct a series of robustness checks and find consistent results. We also study how the spillover effects differ based on the product type (i.e., search goods versus experience goods), incentive experience, prosocial experience, and reviewer quality, and we explore the within-product spillover effect. These findings advance the understanding of the interplay between financial incentives and prosocial behaviors and provide important managerial implications for platforms that hope to motivate users' prosocial contributions.
Qiao, D. D., et al. (2020). "Financial Incentives Dampen Altruism in Online Prosocial Contributions: A Study of Online Reviews." Information Systems Research 31(4): 1361-1375.
Current trends on patient empowerment indicate that patients who play an active role in managing their health also seek and use information obtained from online reviews of physicians. However, it is far from certain whether patient-generated online reviews accurately reflect the quality of care provided by physicians, especially in the context of chronic disease care. Because chronic diseases require continuous care, monitoring, and multiple treatments over extended time periods, it can be quite hard for patients to assess the effectiveness of a particular physician accurately. Given this credence nature of chronic disease care, the research question is the following: what is the information value associated with online reviews of physicians who treat chronic disease patients? We address this issue by examining the link between online reviews of physicians and their patients' actual clinical outcomes based on a granular admission-discharge data set. Contrary to popular belief, our study finds that there is no clear relationship between online reviews of physicians and their patients' clinical outcomes, such as readmission risk or emergency room visits. Our findings have two major implications: (a) online reviews may not be helpful in the context of healthcare services with credence aspects; (b) because treatments of chronic diseases have more credence good characteristics when compared with surgeries or other acute care services, one should not extrapolate research on surgeries and acute care services to chronic disease care. Rather, one should acquire a better understanding of the information conveyed in online reviews regarding a physician's ability to deliver certain clinical outcomes before drawing inferences. Our findings have important ramifications for all stakeholders including hospitals, physicians, patients, payers, and policymakers.
Saifee, D. H., et al. (2020). "Are Online Reviews of Physicians Reliable Indicators of Clinical Outcomes? A Focus on Chronic Disease Management." Information Systems Research 31(4): 1282-1300.
When does information technology (IT)-business alignment matter most for leveraging IT investment for firm performance? Drawing on dynamic capabilities theory, we posit that firms that focus on IT-business alignment at the later stages (i.e., the IT delivery stage and IT change stage) of the IT lifecycle are better able to translate their IT investment into revenue than firms that focus on IT-business alignment at the early stage (i.e., IT investment planning stage) of the IT lifecycle. To test our theory, we leverage archival data from more than 120 firms in India that differ in terms of where in the IT lifecycle they focused on IT-business alignment as the key priority. We find that the positive relationship between IT investment and firm revenue is stronger for firms that focus on IT delivery alignment or IT change alignment than for firms that focus on IT investment planning alignment. In addition, we find that at higher levels of IT investment, firms that focus on IT change alignment or IT delivery alignment have higher revenue than firms that focus on IT investment planning alignment, whereas at low levels of IT investment, firms that focus on IT investment planning alignment outperform firms that focus on IT delivery alignment or IT change alignment. Overall, the study contributes by documenting that IT-business alignment at the IT delivery stage and IT change stage of the IT lifecycle are more critical for leveraging IT investment for firm performance than IT-business alignment at the IT investment planning stage.
Saldanha, T. J. V., et al. (2020). "Aligning Information Technology and Business: The Differential Effects of Alignment During Investment Planning, Delivery, and Change." Information Systems Research 31(4): 1260-1281.
In recent years, we have witnessed substantial increases in the frequency, scope, and cost of data breaches. Accordingly, information security researchers have sought to understand why employees comply with or violate information security policies (ISPs) designed to prevent security incidents. Research suggests that compliance is not uniform but rather depends on contextual and individual factors, such as national culture. Scholars have long recognized that organizational subculture may be equally influential. A key example is professional subcultures, within which members typically share similar education, training, values, and identity. Research shows that behavior can vary widely across professional subcultures, and thus a single approach to promoting ISP compliance may not be equally effective across these subcultures. However, it is presently unclear how subculture influences ISP compliance. To address this need, we adopt a mixed-methods design to examine differences in ISP violation behavior among different professional subcultures in a healthcare organization. We first conducted an exploratory qualitative study to identify different attitudes toward ISP violations among three prominent professional healthcare groups: physicians, nurses, and support staff. Then, using a combination of qualitative interviews, observational fieldwork, and a quantitative survey, we explored how professional group membership moderates (1) the influence of perceptions of sanctions on intentions to violate the ISP and (2) the effect of intentions to violate on actual ISP violation behaviors. Our findings highlight the substantial effect of professional subculture on ISP violations in organizations and provide insights for researchers and managers that may be used to improve overall ISP compliance.
