Public goods in networks with constraints on sharing
( Gerke Stefanie | Gutin, Gregory | Hwang, Sung-Ha | Neary Philip R. )JOURNAL OF ECONOMIC THEORY2024-07
Abstract
This paper considers incentives to provide goods that are partially shareable along social links. We introduce a model in which each individual in a social network not only decides how much of a shareable good to provide, but also decides which subset of neighbours to nominate as co- beneficiaries. An outcome of the model specifies an endogenously generated subnetwork and a public goods game occurring over the realised subnetwork. We prove the existence of specialised pure strategy Nash equilibria: those in which some individuals contribute while the remaining individuals free ride. We then consider how the set of efficient specialised equilibria vary as the constraints on sharing are relaxed and we show that, paradoxically, an increase in shareability may decrease efficiency.
Leveraging the Digital Tracing Alert in Virus Fight: The Impact of COVID-19 Cell Broadcast on Population Movement
( Ghose, Anindya | Lee, Heeseung Andrew | Oh, Wonseok | Son, Yoonseock )INFORMATION SYSTEMS RESEARCH2024-06
Abstract
Digital tracing alerts have emerged as an effective means to share information with agility in responding to disaster outbreaks. Governments are able to instantaneously coordinate the available information to provide information related to the disaster and promote preventive actions. However, despite the opportunities granted by these innovative technologies in managing disasters, privacy concerns can arise regarding how much of individuals' private information should be collected and disclosed. With these considerations, we examine the extent to which instant digital tracing alerts and the information included in the alerts affect people's actions toward disaster management in the context of South Korea. We leverage 4,029,696 subdistrict and hour level data set, including population movement and digital tracing alert transmission information. Our results show that digital tracing alerts are effective in inducing population movement out of the infected area and decreasing the population density. Specifically, instant messaging induces movement among 2.45% of an infected district's population to other administrative areas in a given hour and decreases population density by 3.68%. Furthermore, the effectiveness of digital tracing alerts hinges on the inclusion of different private information of individuals on case confirmation. We find the heterogeneous effect of digital alerts, with the effects being more pronounced among young and male individuals and in business-centric areas. Further analysis reveals that digital tracing alerts are particularly effective at the early stage of the disaster. In addition, sending more than three messages within a day has a valid counter-effect (i.e., fatigue effects), whereas messages sent when the cumulative number of confirmed cases is high exert a less positive effect than when the verified cases are low (i.e., desensitization effects). Our results provide policy makers and law enforcement with novel insights into whether and how the use of information technology can facilitate disaster management and to what extent they should collect and expose private information to effectively safeguards public health and safety during a crisis.
The Effects of Pressure and Self-Assurance Nudges on Product Purchases and Returns in Online Retailing: Evidence from a Randomized Field Experiment
( Ghose, Anindya | Lee, Heeseung Andrew | Nam, Kihwan | Oh, Wonseok )JOURNAL OF MARKETING RESEARCH2024-06
Abstract
Through a randomized field experiment, this study compares the economic effects of two categories of nudges-self-assurance- and pressure-based interventions-on consumers' purchase and return behaviors. In contrast to pressure-oriented nudges, such as quantity scarcity, time scarcity, and social persuasion, self-assurance nudges are intended to facilitate the validation of product choice and style/size characteristics as well as the self-assurance-grounded justification of the purchase. The findings reveal that self-assurance nudges designed to help consumers make better choices have both short-term (high sales) and long-term (few product returns) benefits. Although pressure-driven nudges offer slightly higher short-term benefits (high sales), they eventually engender unfavorable long-term outcomes (high product returns) for consumers and online retailers. Finally, using return-adjusted net sales as performance measures, the authors find that self-assurance-based nudges are as effective in stimulating purchase as those that capitalize on scarcity and social pressure.
Inter-Unit Executive Redeployment in Multiunit Firms: Evidence from Korean Business Groups
( Chang, Sea-Jin | Kim, Young-Choon | Park, Sangchan )ORGANIZATION SCIENCE2024-05
Abstract
Building on the literature on resource reconfiguration theory, we formulate a new theoretical framework that explains how executive redeployment within a diversified firm transfers different types of human capital embodied in executives to different units facing specific business challenges. In the empirical context of Korean business groups, we find that executives with unit-specific human capital, like turnaround experience, competitive experience, and international expansion experience, are redeployed to units with corresponding business challenges like financial difficulties, intensifying competition, and early-stage international expansion, respectively. We also show that executives with unit-generic human capital, like corporate management practices and interunit coordination experiences, are redeployed to younger units seeking to establish corporate-level policies and practices. Additional analyses also show that the value of firm-specific human capital in driving the redeployment of executives is contingent on their functional orientation and seniority.
Optimal Subsidy Policy for Innovation: Technology Push and Demand Pull
( Chung, Hakjin | Ahn, Hyun-Soo | Lee, Myeonghun | Kim, Sang Won )PRODUCTION AND OPERATIONS MANAGEMENT2024-03
Abstract
Government plays a critical role in developing and adopting new products with social benefits. We study how the government should mix two different subsidies-a technology-push subsidy, which awards manufacturers for cost-reducing R&D efforts, and a demand-pull subsidy, which directly rewards customers-when multiple firms compete in the presence of spillover. We develop a model with the government and two firms: The government first announces a subsidy policy, then the two firms decide R&D investments to reduce production costs and sell the products. We analyze how the optimal subsidy policy and resultant market outcomes change in the social benefit of the product and the spillover level. We find that the government should use a different subsidy policy depending on the social benefit of the product. When the social benefit is low, no subsidy should be given, letting the two firms make discretionary R&D efforts without any inducement. When the social benefit is modest, the government should only give a push subsidy and let the firms lead production adoptions with cost-reducing R&D. When the social benefit is large, the government should provide both subsidies, but the dependence on the pull subsidy increases. We also study how the spillover level influences the optimal subsidy. As knowledge spillover increases, we find that the government should increase the push subsidy to offset the losses incurred by the cost leader. We contribute to the literature by offering policy insights on how the government should design subsidies to maximize the adoption of products with social benefits.
