Spotify, Freemium and Network Effects
Spotify is a music streaming service that has become quite popular in the last few years. One of the main reasons this is true is because of its freemium model. Users can either use the service for free or for a premium. The free account has ads and lower quality audio while premium has no […]
Changing Network Effects: Content-Driven Strategies
Social media rely heavily on network effects. However, with the vast variety of social media that are currently available the main issue for these companies has shifted from how to attract users to how to attract more users than their competitors. According to one Wired article, the answer is the “content-first model.” Traditionally, the social […]
Information Cascades in the 2003 SARS Epidemic in Taiwan
Information cascades are present in a variety of situations, ranging from relatively unimportant everyday occurrences like movie reviews to significant events like terrorist attacks. One such situation can be an epidemic. A recent paper by collaborators from the University of Chicago, National Taiwan University, and National Bureau of Economic Research analyzed the ramifications of information […]
Moods and Consumer Decisions
In an article from The Atlantic titled “How Consumers’ Moods Drive Decisions”, Derek Thompson describes the surprising effect of people’s moods on what people purchase, read, and act. After analyzing at more than one million reviews on online review sites such as Yelp and TripAdvisor, scientists from Georgia Tech and Yahoo Labs found that restaurant […]
Network Effects: a Big Help, and a Big Detriment?
Source: http://www.wired.com/insights/2014/03/reverse-network-effects-todays-social-networks-can-fail-grow-larger/ As explained by the article “Reverse Network Effects” by Sangeet Paul Choudary, “network effects are the holy grail for Internet startups looking for venture-scale returns. “ When dealing with a product with network effects, the value to a user increases as more users use it. With this idea in mind, the article explains how while […]
Expectation vs. Reality
In ideal conditions, with no outside intervention, it is relatively simple to predict the movements of networks. In particular, the movements of a basic economy can be predicted with the formula r(x)f(z) where r(x) is the intrinsic interest of some consumer x in the target good and f(z) is the measure of benefit when the z fraction of the population […]
Mobile Payment Adoption
In recent years, society is beginning to embrace the new trend of using mobile devices as an alternative method when purchasing items. People may think that Apple was the first company to develop this technology, but actually Google developed their own mobile payment technology in 2011. Google called their service Google Wallet which allows its users to store […]
Private Marketplace: Brand New Buzzword in Digital Advertising
Private marketplace, also called private exchange, is a brand new form of ad exchange. At present, ad exchange is the most commonly used digital advertising method, which allows advertisers and publishers to buy and sell ad inventory through real-time auctions (also called real-time bidding). In contrast with open exchange, private marketplace gives publishers tighter control […]
Confounding Variables in the “Wisdom of Crowds”
The link below leads to an article in the New Statesman discussing a study in which “superforecasters” with little to no expertise or access to any secret information predict the outcome of big geopolitical questions, bringing to attention how the “wisdom of crowds” can be harnessed by governments. Superforecasters, or supers, are defined as […]
Cow weigh-in
We covered prediction markets in some detail with horse races and bets on horse races. This was used to cover the concept of the “wisdom of crowds” This “wisdom” is a group’s aggravated opinion on something that involves a bit of estimation, rather than a single expert’s opinion. The betting example in class showed that […]
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