BOX 4.6

Examples of Economics and Other Social Science Research That Has Contributed to Information Technology Development

  • Role of regulation—Economics research by Alfred Kahn, Paul Joskow, Roger Noll, and Kip Viscusi redefined the role of regulations from one of protecting the public interest to one of stepping in when markets do not drive prices to marginal costs. This redefinition spurred deregulation in a number of industries, including communications.

  • Network externalities—Work by Hal Varian, Paul David, Brian Arthur, Garth Saloner, Michael Katz, Carl Shapiro, and Nicholas Economides showed that the network industries and information industries are characterized by “network externalities,” which make the value to a consumer of a particular product or service increase as more people use it. An example is an Internet connection, which is more valuable if more information is available and larger numbers of people are connected. This insight leads to an emphasis on getting products and services into the marketplace quickly, pricing them low at first to spur market growth and then raising prices as more units are sold and their value grows.

  • Internet economics—Work in this area by Lee McKnight, Joseph Bailey, Hal Varian, and Jeffrey Mackie-Mason has implications for the pricing of Internet-based resources and services, such as concepts for allocating resources based on the willingness of users to pay.

  • Group dynamics and decision making—Research by Sara Kiesler, Suzanne Iaconno, Wanda Orlikowski, and others (e.g., Siegel et al., 1986) on group dynamics and decision making in small electronic groups informed the design of systems that support group decisions.

  • Diffusion of applications—Research by M. Lynne Markus (1987) and others on how critical mass predicts the diffusion of networked applications within organizations and informs the deployment decisions for information technology (IT) applications.

  • Distribution of the benefits of IT—Research by Tora Bikson, Lee Sproull, and others demonstrating that peripheral members of social systems benefit more from use of electronic communication than do central members (e.g., Sproull and Kiesler, 1991) influenced policy decisions about subsidies for access to the Internet.

  • Information sharing—Research by Paul Attewell, Tora Bikson, Sara Kiesler, Robert Kraut, Lee Sproull, and others demonstrated how personal attributes and organizational characteristics such as incentive systems influence peoples' use of IT for information sharing. Research by Julian Orr (1990) and others demonstrated that service technicians often have more useful technical expertise than do system designers and share their knowledge in a community of practice. This work influenced the design of a community-based troubleshooting database at Xerox Corporation that has resulted in significantly improved service performance (Bell et al., 1997).

SOURCES: Marvin Sirbu, Carnegie Mellon University, presentation atthe National Academy of Engineering workshop “How Can Academic ResearchBest Contribute to Network Systems and Communications,” Washington,D.C., October 30, 1998; Lee Sproull, New York University, personalcommunications dated August 22, 1999, and April 11, 2000.

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