Essays on the analysis and design of efficient electronic market places
Zhulei Tang, Carnegie Mellon University, United States
Doctor of Philosophy, Carnegie Mellon University . Awarded
This dissertation addresses the analysis and design of efficient electronic marketplaces in three essays. The first essay analyzes how to design efficient peer-to-peer information exchange in the presence of externalities. The second essay analyzes how to design efficient privacy protection mechanisms in the presence of consumers' privacy concern. The third essay analyzes the impact of changes in shopbot use over time on pricing behavior in the Internet book market.
Essay 1. The virtual commons: Why free-riding can be tolerated in file sharing networks. We develop static and dynamic analytical models to analyze the behavior of peer-to-peer networks in the presence of free-riding. One commonly observed characteristics of peer-to-peer networks is that peers can consume network resources (e.g., content, processing power, storage) through downloading without providing resources to the network, known as free-riding. The free-riding behavior of "peers" can lead to an under provision of content and therefore will degrade the performance of P2P networks.
Essay 2. Protecting online privacy: Self regulation, mandatory standards, or caveat emptor. In this essay we develop a model of asymmetric information, in which a retailer has private information regarding its own cost of protecting consumer privacy. We use this model to analyze retailers' strategies under three privacy protection regimes: Mandatory standards, where governments intervene and enact strict privacy protection standards for specific types of consumer information; Caveat emptor, where retailers are required by law to abide by any agreements they make with consumers to protect their privacy (e.g., through posted privacy policies), but are under no obligation to make such agreements; and Seal-of-approval programs (e.g., the programs offered by TRUSTe and Better Business Bureau), where retailers can choose---for a fee---to join a seal-of-approval program administered by a seal granting authority. We analyze the optimality of the regimes under different consumer preferences.
Essay 3. The impact of shopbot use on prices and price dispersion: Evidence from disaggregate data. The growth of Internet price search tools, notably shopbots, has reduced consumers' search costs, allowing consumers to easily become informed of price and product characteristics among competing sellers online. This research seeks to fill a gap in the literature by analyzing the impact of changes in shopbot use over time on pricing behavior in the Internet book market. (Abstract shortened by UMI.)
Tang, Z. Essays on the analysis and design of efficient electronic market places. Doctor of Philosophy thesis, Carnegie Mellon University.
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