Product information websites have become ubiquitous in supporting B2C E-Commerce. This study explores their impact on firm profitability, consumer surplus, and social welfare. Using an analytical model, we show that firms take advantage of such infomediaries and reduce their own information investments, increasing their profitability. Surprisingly, we find that the existence of these websites may actually reduce social welfare. Contrary to the common belief that product information websites are good for buyers, we show that they may be hurting consumers, even when they seek to maximize consumer surplus as their principal goal. These findings question the uncritical acceptance of infomediaries as beneficial to markets in general, and buyers in particular, especially when the infomediaries assume roles that substitute the information disclosure investments that sellers freely choose to make. > >
We study the determinants of output quality in offshore business process outsourcing (BPO). Firms can exert control over output quality through incentives formally written into contracts and allow both clients and providers to manage the offshore agents creating a dual governance mechanism. We use a combination of two data sets, a cross sectional data set of 139 processes and a balanced panel data set comprising 21 processes with 36 observations per process, to investigate the impact of different factors on the quality of output of offshore BPO providers. Our findings point to the strong moderating effect of process codifiability on the dual governance mechanism. Process codifiability is not only associated with higher output quality, it also moderates the functioning of the dual governance mechanism and determines when the managerial efforts of the client and provider are substitutes and when they are complementary. We show that contractual incentives tied to quality are generally associated with a higher quality of output. Finally, we show that the use of process-level inter-organizational information systems also has a positive impact on the output quality of offshore BPO providers.
We use panel data from multiple wards from two hospitals spanning a three-year period to investigate the impact of automation of the core error prevention functions in hospitals on medical error rates. Although there are studies based on anecdotal evidence and self-reported data on how automation impacts medical errors, no systematic studies exist that are based on actual error rates from hospitals. Further, there is no systematic evidence on how incremental automation over time and across multiple wards impacts the rate of medical errors. The primary objective of our study is to fill this gap in the literature by empirically examining how the automation of core error prevention functions affects two types of medical errors. We draw on the medical informatics literature and principal-agency theory and use a unique panel data set of actual documented medical errors from two major hospitals to analyze the interplay between automation and medical errors.We hypothesize that the automation of the sensing function (recording and observing agent actions) will have the greatest impact on reducing error rates. We show that there are significant complementarities between quality management training imparted to hospital staff and the automation of control systems in reducing interpretative medical errors. We also offer insights to practitioners and theoreticians alike on how the automation of error prevention functions can be combined with training in quality management to yield better outcomes. Our results suggest an optimal implementation path for the automation of error prevention functions in hospitals.
The risks associated with outsourcing have been the principal limitation on the growth of business process outsourcing, especially cross-border outsourcing. In addition to technological improvements in risk management, it is possible to reduce the risk of opportunistic behavior faced by the buyer by redesigning work flows and dividing work among multiple vendors, increasing the range of tasks that are now appropriate candidates for outsourcing. We provide a taxonomy of risks associated with the outsourcing of business processes. We focus on strategic risks and identify the components of this risk and the means by which it can be mitigated.
When producers of goods (or services) are confronted by a situation in which their offerings no longer perfectly match consumer preferences, they must determine the extent to which the advertised features of the product reflect the product's actual attributes. We find that the two important determinants of sellers' advertising strategy are the Repeg Cost Ratio, and the Repeat Sales Coefficient. The interplay of these two factors gives rise to four possible strategic scenarios. In the ambiguous fourth scenario, we show that sellers' strategy for information production goods will differ considerably from information consumption goods based on product complexity and cost of product return (borne by the buyer). Finally, we demonstrate that markets are often characterized by self-reinforcing limits on the extent of opportunistic advertising by sellers.