Malicious software, commonly termed Òmalware,Ó continuously presents one of the top security concerns, and causes tremendous worldwide financial losses for organizations. In this paper, we propose a structural risk model to analyze malware propagation dynamics measured by a four-parameter (asymptote, point of inflection, rate, and infection proportion at inflection) growth curve. Using both social network data and technological network infrastructure from a large organization, we estimate the proposed structural risk model based on incident-specific nonlinear growth curves. This paper provides empirical evidence for the explanatory power of the structural characteristics of the underlying networks on malware propagation dynamics. This research provides useful findings for security managers in designing their malware defense strategies. We also simulate three common malware defense strategies (preselected immunization strategies, countermeasure dissemination strategies, and security awareness programs) based on the proposed structural risk model and show that they outperform existing strategies in terms of reducing the size of malware infection. > >
Consumer review systems have become an important marketing communication tool through which consumers share and learn product information. Although there is abundant evidence that consumer reviews have a significant impact on product sales, the design of consumer review systems and its impact on review outcomes and product sales have not yet been well examined. This paper analyzes firms' review system design and product pricing strategies. We formally model two review system design decisionsÑwhat rating scale cardinality to use and whether to offer granular review reports. We show that firms' optimal design and pricing strategies critically depend on contextual characteristics such as product valuation, product mainstream level, and consumer misfit cost. Our results suggest that it is beneficial to host a review system only when the product valuation is higher than a threshold. Furthermore, firms should choose low rating scale cardinality for niche products and high rating scale cardinality for mainstream products. When consumers' misfit cost is relatively high, including granular reports in the review system enables firms to attract the favorable consumer segment. Different pricing strategies should be deployed during the initial sale period for different product types. For niche products, firms are advised to adopt lower-bound pricing for high-quality products to take advantage of the positive word of mouth. For mainstream products, firms are advised to adopt upper-bound pricing for high-quality products to enjoy the direct profit from the initial sale period, even after taking into account the negative impact of high price on consumer reviews.
The status quo of prohibiting broadband service providers from charging websites for preferential access to their customers-the bedrock principle of net neutrality (NN)—is under fierce debate. We develop a game-theoretic model to address two critical issues of NN: (1) Who are gainers and losers of abandoning NN? (2) Will broadband service providers have greater incentive to expand their capacity without NN? We find that if the principle of NN is abolished, the broadband service provider stands to gain from the arrangement, as a result of extracting the preferential access fees from content providers. Content providers are thus left worse off, mirroring the stances of the two sides in the debate. Depending on parameter values in our framework, consumer surplus either does not change or is higher in the short run. When compared to the baseline case under NN, social welfare in the short run increases if one content provider pays for preferential treatment but remains unchanged if both content providers pay. Finally, we find that the incentive to expand infrastructure capacity for the broadband service provider and its optimal capacity choice under NN are higher than those under the no-net-neutrality (NNN) regime, except in some specific cases. Under NN, the broadband service provider always invests in broadband infrastructure at the socially optimal level but either under- or overinvests in infrastructure capacity in the absence of NN.
Whether broadband service providers (BSPs) should be allowed to vertically integrate with content providers is a contentious issue. This is even more so when viewed through the lens of the net neutrality debate, since the vertically integrated firm can prioritize the delivery of its own content at the expense of that of its competitors if net neutrality is not enforced. Using a game-theoretic model, we analyze the issues of vertical integration of content and broadband services surrounding this debate from an economic perspective. Our analysis establishes the various equilibria in the game and shows that the vertically integrated BSP does not have any incentive to abide by the principles of net neutrality. If net neutrality is not enforced, social welfare might, in certain cases, decrease with vertical integration, and in such cases, the BSP's objectives are at odds with that of the social planner. With other ranges of parameter values, social welfare increases with vertical integration at the expense of the competing pure-play content provider. Interestingly, we find that it is not always true that the BSP will always degrade the delivery of the competing content, and in fact will sometimes have the incentive to prioritize the latter over its own. The analysis thus provides crucial inputs to policymakers as they decide on whether to allow vertical integration between a BSP and a content provider in the absence of net neutrality.