Contributions in Merlin

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One of the major impacts of the Internet has been the vast increase in the amount of information that became available "for free". The provision of free information, or more specifically how much information to give away for free as a viable business model, has puzzled many observers as well as managers. To study this problem, we address two related questions: First, what portion of the information good should be offered as a free sample? Second, how much should a firm charge for the full version? To address these questions, we develop an analytical model, in which a firm offers both a full version and a free sample, on which it earns advertising revenues. Taking into account customers' initial valuation (willingness-to-pay) and their experienced quality with the free version, we characterize the optimal sample portion that should be offered for free and the price of the paid version. For both cases where either free sampling aims to persuade all consumers to buy or only those with high willingness-to-pay, we find that is optimal for the firm to offer a larger free sample when customers underestimate product quality. Our model assumptions and results are generally consistent with an empirical analysis of actual firm data on the market for news. Next, we compare the models’ implications with managerial decisions and show that managers have a tendency to underestimate the impact of free samples when consumers will use them extensively in updating their expectations about product quality.

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In this paper we take the problem of a market-based P2P backup application and carry it through market design, to implementation, to theoretical and experimental analysis. While the long-term goal is an open market using real money, here we consider a system where monetary transfers are pro- hibited. We ¯rst describe the design of the P2P resource ex- change market and the UI we developed. Second, we prove theorems on equilibrium existence and uniqueness. Third, we prove a surprising impossibility result regarding the lim- ited controllability of the equilibrium and show how to ad- dress this. Fourth, we present a price update algorithm that uses daily supply and demand information to move prices towards the equilibrium and we provide a theoretical and experimental convergence analysis. The market design de- scribed in this paper is already implemented as part of a Microsoft research project on P2P backup systems and an alpha version of the software has been successfully tested.

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This paper reports on the design of a collaborative system to support citizens' advisory services. Recent research on the adoption of collaborative technologies indicates that: a) successful collaborative technologies diffuse from the private sector to the business sector and not vice versa, b) collaborative processes evolve and therefore cannot be prestructured in detail, and c) creative collaboration can be characterized as creating and sharing mental models. We demonstrate how these insights informed our design of a citizens' advisory system and provide data from an evaluation in a German city. Implications for the design of our collaborative system are offered.

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