From Dellarocas, C., Katona, Z., & Rand, W. (2013). Media, aggregators and the link economy: Strategic hyperlink formation in content networks. Management Science, 59 (10), 2360-2379.
In today’s link economy, whether a blogger paraphrases news articles or a fully automated aggregator harvests content from across the web, the pathways between content producers and audiences have become increasingly complex. So how should content producers respond to competition from aggregators and from each other?
How should content producers respond to competition from aggregators and from each other?
A new study from Boston University School of Management’s Chrysanthos Dellarocas, professor of information systems and director of Boston University’s Digital Learning Initiative, together with Zsolt Katona (University of California at Berkeley) and William Rand (University of Maryland), is the first to model the complex, interrelated implications of strategic hyperlinking and investment in content production. Their analysis, demonstrating scenarios in which such links can boost everyone’s profits, thus yields important implications for professional content producers who have until now been reluctant to link to competitors.
When Linking Increases Profits
Addressing questions relevant to both firms and regulators, Dellarocas et al. identify gaps in existing network economics research around the impact of freely established links and the strategies that motivate their formation. For example, what are the effects of linking to competitors, and when should inbound links be refused?
Dellarocas and his co-authors show that although linking can result in low-quality sites free-riding on high-quality content, “in settings where there are evenly matched competitors, the option of placing links across sites may lead to equilibria where some or all sites are better off relative to a no-link setting.”
Links between peer content sites can increase profits by reducing competition, overproduction, and duplication. The intuition is that, instead of each site expending resources to produce what is essentially duplicate content, everyone can benefit if one site specializes in producing really good content and other sites link to it. Sites that invest in high-quality content benefit from additional referred traffic, while those publishing the links become trusted hubs that attract visitors without having to pay the cost of content production. Different sites might specialize in producing content on different topics, one on politics and another on sports, for example. Thus, all sites produce the type of content they are best at and link to the rest. In this scenario, consumers benefit all-round.
The authors point out that the above scenario can sustain the market entry of inefficient players, allowing them to free-ride on the success of other content sites by linking to them, potentially denting the revenues of target sites. Still, no content site would benefit from unilaterally blocking such links, because then free-riding sites would simply link to their competitors.
The Impact of Aggregators
Acknowledging that aggregators ‘steal’ traffic from content sites, the authors also point out that, “by making it easier for consumers to access good content, aggregators increase the attractiveness of the entire content ecosystem and, thus, also attract traffic away from alternative media.”
While aggregators may direct more traffic to high-quality sites, they also take away a slice of profits from content sites. This happens because some aggregator visitors check article headlines and snippets at the aggregator but never click through to the original articles. Furthermore, aggregators tend to increase competition between content sites. This may boost quality but reduce content producer profits.
See more about “Media, Aggregators and the Link Economy: Strategic Hyperlink Formation in Content Networks,” at Management Science.
SMG ranked 11th in the world by Corporate Knights
Boston University School of Management’s MBA program placed 3rd among U.S. universities on the Corporate Knights Global Green MBA survey, which examines how universities around the world are faring at integrating sustainability into the academic experience. The School ranked 11th globally.
The Toronto-based business magazine, which focuses on clean capitalism, created the survey in 2003, concentrating solely on Canadian schools for the past decade. This year, the survey was expanded internationally to include MBA programs from 17 countries. Participating schools were assessed on institutional support, student initiatives, and coursework.
The School’s MBA program has incorporated various courses in its curriculum that emphasize sustainability, such as PL849: Global Sustainability, PL870: Government, Society and Sustainable Development, and SI841: Strategies for Environmental Sustainability.
Corporate Knights’ results also come only months after an MBA team from the School won first place in the P&G Sustainability Challenge, which required eight multidisciplinary teams from across the University to create and present ideas to a panel of managers from P&G, Gillette, Veolia, and NSTAR that might aid P&G in their efforts to increase their renewable energy consumption at the South Boston Gillette site.
The survey’s findings are indicative of the School’s dedication to implementing environmental responsibility and sustainability in all aspects of its educational process.
See the full survey and analysis of the 2013 Global Green MBA Survey here.
Guide to 322 Green Colleges praises sustainability office, student organizations, and sustainability-related courses
Excerpts from Bostonia:
Boston University is one of the most environmentally responsible colleges in the United States and Canada, according to the new edition of The Princeton Review‘s Guide to 322 Green Colleges.
“In a few short years Boston University has made significant strides toward a sustainable future,” the authors write in the guide. “With its sustainability committee, four working groups, sustainability office, a one million dollar revolving fund, departments, student organizations, and nearly 400 courses related to sustainability, the university has developed an impressive sustainability program by any measure.”
The Princeton Review took note of BU’s green buildings and transportation and also drew attention to its retrofitting of existing buildings for energy efficiency through equipment, lighting and energy management systems, and window replacement projects.
In its section on Boston University, The Princeton Review wrote, “In 2011, BU became a member of the Founding Circle of the ‘Billion Dollar Green Challenge.’ Buildings currently under construction will seek LEED certification or better, and there are already two LEED-certified buildings on campus. BU has increased its waste-diversion rate from four percent to 31 percent. Ninety-two percent of students arrive to campus by alternative means. The main campus is organized along one of Boston’s main thoroughfares, with nine subway stops, thirteen intercity bus lines, the BU Bus, and three other shuttle services serving the campuses. BU has an active ride share program and boasts the first bike lanes in Boston’s growing network, which now incorporates more than 100 miles of city streets and parks.
“Other highlights include an award-winning website to engage the university community with a monthly sustainability challenge. To keep up the green pace, there are seventeen sustainable student organizations on campus, from BU Bikes to USGBC Students. BU’s green initiatives even extend to the university’s myriad dining halls. Efforts include 91 percent of the facilities running pre-consumer composting programs, sourcing cage-free eggs, and donating leftover baked goods to local meal programs, food pantries, and shelters.”
“Colleges train the next generation of leaders who will ultimately be responsible for putting green ideas into practice,” the authors note. “By infusing sustainability principles into every aspect of higher education, there is a new priority for a whole generation of leaders, educated and trained, to make a greener world now.”
Photo via BU Today
Team Wins First Prize in Energy Efficiency Category
By Mark Dwortzan via BU College of Engineering
A College of Engineering and School of Management team took first prize in the energy efficiency category of the annual MIT Clean Energy Prize on May 6, one of six premiere regional clean energy student business plan competitions in the U.S.
A collaboration between students and faculty from ENG and SMG, the team, Aeolus Building Efficiency, won $20,000 for its business plan and presentation for a full-service company that utilizes software to optimize airflow and reduce energy consumption in large office heating, ventilation, and cooling (HVAC) systems. The technology could be a game-changer for today’s commercial buildings, which account for 18 percent of annual greenhouse gas emissions and 36 percent of national electric utility demand.
Consisting of ENG’s senior Ryan Cruz, Associate Professor Michael Gevelber, and former Professor Donald Wroblewski from the Mechanical Engineering Department, and MBA candidates David Cushman, Jonathan Ellermann, and Benjamin Smith from SMG, Aeolus outperformed 15 other teams from nine states, including three semifinalists representing Harvard University, MIT, and the University of Chicago.
Aeolus drew on ENG members’ expertise in building energy efficiency and HVAC systems optimization, and SMG members’ business development, operations, project management and sustainability experience. The team’s presentation impressed a panel of six judges from academia, government and industry who based their assessments on environmental benefit, creativity, execution and financial strategy, market and customer knowledge, and team strength.
Benjamin Smith (MBA’13) relished the opportunity to compete against outstanding teams and technologies from some of the nation’s top academic institutions. “Not only were we able to develop a comprehensive and compelling business plan, but the competition gave us an opportunity to substantiate that plan with cleantech industry leaders,” he observed. “It was an amazing experience.”
Taking part in the competition reinforced Ryan Cruz’s (ME’13) aspiration to pursue a career in the energy efficiency field. “I was able to learn more about the business side of engineering and aspects of building energy efficiency that I would not have normally been exposed to in the classroom,” he said.
“It was a great learning experience for all the team members, and we’re proud to get BU’s name recognized at such a highly competitive event,” said Gevelber (ME, MSE, SE). “We also had great mentoring from other BU faculty in both schools, and received support from BU’s Office of Technology Development, Institute for Technology, Entrepreneurship and Commercialization (ITEC) and Sustainable Neighborhood Lab.”
HVAC systems account for a large portion of energy use in mid- to large-sized buildings, and energy use and cost scales strongly with airflow. This is particularly true in older buildings designed when energy was much cheaper and HVAC systems were designed with high air flow rates. Based on concepts developed by Paul Gallagher (ME, MS’13) in his master’s thesis, Aeolus aims to commercialize its software-based service that enables room-by-room measurement and optimization of airflow rates, thereby reducing energy consumption while maintaining thermal comfort and meeting ventilation requirements.
Invented by Gevelber, Wroblewski, and Gallagher and now being patented by BU, the breakthrough technology uses existing, computer-based building automation systems to reduce large building HVAC energy consumption by up to 20 percent without equipment installation, intensive manual labor or long payback periods.
“What’s amazing about our approach is that the system would take the same time to work on a building the size of Sargent College as it would for the Prudential Center,” Gevelber explained.
Formed in 2007 to help develop a new generation of energy entrepreneurs and companies and sponsored by NSTAR and the U.S. Department of Energy, the MIT Clean Energy Prize offers awards in three categories—renewable energy, infrastructure and resources, and energy efficiency. The competition’s $20,000 Energy Efficiency Track Prize is sponsored by the Massachusetts Clean Energy Center, which seeks to accelerate the success of clean energy technologies, companies and projects in the Commonwealth while creating high-quality jobs and long-term economic growth for the people of Massachusetts.
Pictured above is Team Aeolus Building Efficiency: Professor Michael Gevelber (ME, MSE, SE), David Cushman (MBA’14), Jonathan Ellermann (MBA’13), Ryan Cruz (ME’13), and Benjamin Smith (MBA’13) with $20,000 Energy Efficiency Track Prize. (A sixth Aeolus team member, former Professor Donald Wroblewski (ME) was unavailable for the photo.)
BU competition featured eight multidisciplinary teams of undergraduates and graduates; first place team will go on to present ideas to Gillette’s top managers
By Gilberto Millares (IMBA’13) from the BU MBA Student Life blog
Some of Procter & Gamble’s sustainability goals for the future include completely eliminating the waste they currently generate, using only renewable energy in all their facilities, and having environmentally-friendly products and packages. As you might guess, such endeavors present an extremely difficult challenge for a global company, so they are constantly looking for ways to make marginal or disruptive changes in their operations that allow them to be closer to achieving these goals. One of the ways they’re doing this is by sponsoring the P&G Gillette Sustainability Challenge, which brings together multidisciplinary teams from different Boston University schools and colleges and challenges them to come up with ideas that might be applied in P&G operations.
On April 12, eight teams consisting of undergraduate and graduate students from programs including engineering, public policy, biomedical engineering, and management had the opportunity to showcase their findings to a group of managers from P&G Gillette, Veolia, and NSTAR. We presented different ideas that would allow P&G to increase their renewable energy consumption at the South Boston Gillette site by making a business case for each proposed project.
While the format differed a bit from the standard case competition, the results were just as meaningful. Rather than diving into the project for 48 hours, we were given two weeks to find different approaches to help them achieve their goals. And even though it might sound like more than sufficient lead time, we had to fit several seminars into our busy schedules to learn about energy projects throughout the country and the world, research technologies that are being implemented in the industry, and find ways to link business and engineering aspects for each submitted idea—no easy task!
Finally, after all the teams had presented their ideas, we had a small reception as the judges made the final decision. First place was awarded to a team consisting of MBA and IMBA students (pictured above), as well as LEAP, mechanical engineering, and public policy students, who will now have the opportunity to present their pitch to a group of Gillette’s top managers. However, I think the most rewarding aspect of the competition was working with a truly diverse group of people that mimics the diversity and complexities of the business world.
Pictured: The winning team of MBA and IMBA students with the panel of judges from P&G Gillette, Veolia, and NSTAR. Group photo courtesy of the BU MBA Student Life blog.
Homepage image via flickr user Pylon757.
Assisting Institute on Research for Better Patient Decisions & Outcomes
Boston University School of Management’s Alan Cohen has been appointed to the federal Advisory Panel on Improving Healthcare Systems by the Patient-Centered Outcomes Research Institute (PCORI), created by the Affordable Care Act of 2010.
PCORI is an institute authorized by Congress to research and provide information to both patients and health care providers with the goal of enabling more informed medical and health-related decisions.
According to PCORI, the Advisory Panel on Improving Healthcare Systems is one of four panels appointed to represent the institute’s “broad stakeholder community.” In addition to enhancing healthcare systems, these expert panels will guide PCORI’s efforts to improve patient engagement, address disparities, and enable better patient and practitioner assessment of options for prevention, diagnosis, and treatment.
Along with twenty other leading researchers, clinicians, industry representatives, policymakers, and patient advocates in the field of improving healthcare systems and outcomes, Professor Cohen will help the institute “refine and prioritize research questions, provide needed scientific and technical expertise….and help us model full and meaningful patient and stakeholder engagement efforts.”
Cohen is a professor of health policy and management at Boston University and executive director of the School’s Health Policy Institute. He was formerly vice president for Research and Evaluation at the Robert Wood Johnson Foundation (RWJF), the nation’s largest philanthropic organization dedicated solely to public health, where in 2012 he was named a “Luminary” for his role in research and initiatives having a major impact on the field in the previous forty years. Cohen is also principal author of the book Technology in American Health Care: Policy Directions for Effective Evaluation and Management.
The annual magazine Research at Boston University has profiled the pioneering work and social impact of the School of Management’s Nalin Kulatilaka. In their feature “Considering Community,” they write,
Perhaps it is no wonder that an electrical engineer who became a professor of finance would take an interest in how green buildings can provide monetary benefits for the people who have the resources to fund renewable energy projects….
That’s part of the story of Nalin Kulatilaka, who teaches in the School of Management and is a codirector of the Clean Energy & Environmental Sustainability Initiative.
“My research is on sustainable energy investments,” Kulatilaka says. “From renewable energy sources like solar and wind to energy conservation and energy efficiency investments like building retrofits.”
The thrust of his work is to incentivize the up-front funding for green energy buildings from banks and other sources by writing a new kind of contract for the loans that fuel such changes. The contracts are intended to monetize the savings that green energy can achieve, so that the investors who put up the capital can capture some of the money saved as revenue from the project.
“We are now designing contracts where the building owner and tenant could share the savings.”
Recently, Kulatilaka has worked on buildings owned by the Cambridge Housing Authority in Central Square. Some were heated entirely by electricity, some were particularly leaky, and all lacked the investment capital needed for retrofits.
“My contribution there, with Professor of Earth & Environment Robert Kaufmann and a team of students, was to first assess the opportunity; to try to quantify what the savings would be by using various statistical techniques that analyze the demand patterns of the building,” he says.
“We are now designing contracts where the building owner and the tenant could share the savings. These would occur in such a way that funding could be attracted from conventional—or at least semi-conventional—sources like large banks.”
Fifteen teams competed in first-of-its-kind event hosted by SMG
A team of MBA students from The Fuqua School of Business at Duke University won first place in the Grand Business Challenge in Digital Health, sponsored by Merck and hosted by Boston University School of Management on March 21-23, 2013. The event was also sponsored by Microsoft and the MS·MBA Association.
Formerly the International Technology Strategy Case Competition, the two-day event challenged teams of MBA students from the world’s leading business schools to offer their ideas on how Merck could leverage information technology to transform global healthcare and create value for the world. Unlike a traditional case competition, the Grand Business Challenge allowed for networking and cross-team collaboration, utilized a live case, and allowed each team to focus on one of four tracks of digital health: individual, interconnected, information, and international.
On the first day of the event, each team presented their ideas on challenges in one of the four tracks of digital health. A panel of industry judges selected a winning team from each track to compete in the final round of the Grand Business Challenge the following day.
The Fuqua School of Business (pictured above) was awarded first place for their MercKIT solution, a mobile, cloud-based health clinic kit equipped for front line diagnosis and the treatment of infectious diseases. The team also won the Audience Choice Prize.
The second place team from the University of Southern California, Marshall School of Business, developed a patient-centered mobile phone platform, customizable by country and culture, to engage patients in their health and bolster growth in emerging economies.
Boston University School of Management placed third for their concept, the Adhero platform. Using existing digestible sensor technology embedded on pills, the platform would collect data on medication adherence, provide rewards or reminders to patients, and send data back to providers. Fourth place team University of Calgary Haskayne School of Business proposed an online portal that would facilitate information and a sense of community between customers, payers, producers, and providers.
Teams also had the opportunity to win grants from Microsoft BizSpark to further develop their ideas on digital health. The Microsoft BizSpark Challenge winners were teams from IPADE Business School – Mexico, Neeley School of Business, Anderson School of Management, Tepper School of Business, and a team with members from Joseph M. Katz Graduate School of Business and Kenan-Flagler Business School.
The fifteen participating teams were:
- Boston University School of Management
- Carnegie Mellon University Tepper School of Business
- Cornell University Samuel Curtis Johnson Graduate School of Management
- Duke University – The Fuqua School of Business
- El Instituto Panamericano de Alta Dirección de Empresa (IPADE Business School – Mexico)
- Hong Kong University of Science and Technology Business School
- Indian School of Business
- Seoul National University Business School
- Texas Christian University Neeley School of Business
- University of Arizona Eller College of Management
- University of Calgary Haskayne School of Business
- University of California, Los Angeles (UCLA) Anderson School of Management
- University of North Carolina Kenan-Flagler Business School
- University of Pittsburgh Joseph M. Katz Graduate School of Business
- University of Southern California Marshall School of Business
“It’s a mandate! It’s a tax! How word choice effects Obamacare enrollment.”
The Washington Post‘s Wonkblog, in their Health Reform Watch column, recently spotlighted a study co-authored by Boston University’s Keith Marzilli Ericson on the impact of terminology on enrollment in mandated health insurance. Ericson, an assistant professor of markets, public policy, and law at the School of Management, is also co-author of a related National Bureau of Economic Research paper titled “Pricing Regulation and Imperfect Competition on the Massachusetts Health Insurance Exchange.”
As The Washington Post reports,
It was this week, one year ago, that the Affordable Care Act had its day in court—the Supreme Court, that is.
The health care law had the longest oral arguments of any case the high court has heard; supporters lined up for a seat in the courthouse four days in advance.
Obamacare’s mandated purchase of health coverage survived the challenge. It may not, however, have gotten off scot free: New research suggests the controversy over the mandate may been a blow to its credibility—and Americans’ willingness to comply.
That’s the takeaway from a new paper, authored by Boston University’s Keith Marzilli Ericson and University of Pennsylvania’s Judd Kessler that looks at the difference between describing the health law’s penalty for not carrying insurance as a “mandate” or a “tax.”
The two are, as Ericson describes it, “logically identical.” Beginning in 2014, a person who fails to purchase health insurance will pay a $95 fine, regardless of whether they consider that a tax penalty or a fee for non-compliance with the mandate.
Ericson, whose research focuses on the intersection of health insurance and behavioral economics, had an inkling that the description would matter. He has researched the Massachusetts health reform effort, where a mandate helped the state achieve the highest rate of insurance in the country.
“We expected that the mandate would encourage insurance purchase more than a tax,” he says. “We thought that it establishes a social norm, and a sense of obligation.”
Banner photo courtesy of flickr user DigiDreamGrafix.com
From “A Hidden Markov Model for Collaborative Filtering,” MIS Quarterly, 36(4), 1329-1356.
Commercial websites are constantly suggesting new products and content to us—a mechanized, cyber-age form of the old urging, “if you liked that, you’ll love this!” In tech terms, the systems that generate these suggestions are called personalized recommender systems. But how can these computer systems account for the age-old human tendency to change our desires as time goes on?
A new study by Boston University’s Nachiketa Sahoo and co-authors Param Vir Singh and Tridas Mukhopadhyay is one of the first to address this problem.
Sahoo is an assistant professor in information systems at Boston University School of Management; Singh and Mukhopadhyay are faculty members at the David A. Tepper School of Business at Carnegie Mellon University. Their paper, “A Hidden Markov Model for Collaborative Filtering,” appearing in MIS Quarterly‘s special issue on business intelligence research, suggests using a stochastic algorithm called a hidden Markov model (HMM) to process data about user activity and preferences, rather than the common algorithms used now by most personalized recommender systems. The authors show that the HMM, a more dynamic model, allows online personalized recommender systems to account for changing user preferences.
A New Model to Address Changing User Preferences
The authors point out that dynamic, not static, user tastes and desires are integral to the consumer experience, particularly with the repeat consumption of so-called “experience goods,” such as movies, music, and news. “This causes problems for a recommender system that has been trained to identify customers’ preferences from their past ratings of products,” the authors write.
Sahoo et al. propose a customized HMM algorithm to estimate user preferences and make recommendations. They evaluate their approaches using three real-world datasets: one containing employees’ blog reading activity in a Fortune 500 IT services firm, one documenting users’ movie watching behavior in the Netflix Prize dataset, and one tracking users’ music listening behavior on last.fm. Comparing the performance of their algorithm with that of several other popular algorithms in recommender systems, the authors show that the HMM-based algorithm performs as well or better than the other algorithms, particularly as user preferences change.
Their approach is based on the intuition that older data, rather than being discounted—as they are in some current personalized recommender systems—could instead be used to learn about that user’s preference and then applied to another user. “Data from a user’s past may not be useful for making recommendation for the user now,” they argue, since “her preference has changed, but it might be useful for making a recommendation for someone who currently has that preference.”
Read more about ”A Hidden Markov Model for Collaborative Filtering.”
Banner photo is a visualization of related movies found by a computer algorithm created for Netflix Prize. Each movie is represented by a dot, and colored lines signify a similarity between pairs. Photo courtesy of flickr user chef_ele.