Transaction Costs
Define Transaction costs
cost for gathering information, evaluating alternative options, negotiating, contracting, and physical transaction of the object
Define critical mass
Define the 3 models under ML.
Unsupervised Learning: unlabeled data, use patterns to find outcome
Reinforced Learning: reinforcement loop, using external world to assess effectiveness
Which is better dynamic or fixed pricing? Explain.
Dynamic pricing - can easily respond to volatile markets
take code and use it
save money on R&D
build an open project with a community
steer their own project with open source developers
build alliances with other companies to engage in the community
How do platforms redefine companies roles in value chain?
Eliminates intermediaries and introduces new opportunities for intermediaries
Describe lock-in and the stages of the cycle
Entrapment of user due to technological dependencies
Cycle:
choose a technology, have dependencies, create entrapment, ensure lock-in
Describe encoding, aggregation, and commensuration. How do these relate?
Encoding: formalizing interactions as objects that become raw material to be analyzed
Aggregation: combining similar encoded data and grouping them into clusters
Commensuration: using a singular unit of measurement to compare users and their actions
What are the 3 types of dynamic pricing differentiations?
1: prices set dependent on what the individual is willing to pay
2: non-linear; prices depend on volume purchased
3: price differentiation achieved by exploiting consumer differences; same price for given person
Name the 5 characteristics of blockchain.
Immutability, resilience, distributed, traceability, non-repudiated
Name and define the 3 costs under transaction costs
search costs: costs needed to find buyers/sellers
contracting costs: costs to define terms of agreement
control costs: costs to enforce terms of agreement
Describe positive externalities and negative externalities and provide examples.
Positive: surplus arising from interaction of network components (better utility, decreased costs, better integration)
Negative: loss because of component interactions (slower service, security risks, decreased quality)
Describe ANNs
Artificial Neural Networks are a statistical technique that mimics human neural networks by using adaptive weight mechanisms to replicate learning
How do ICTs work with dynamic pricing?
Describe the 3 types of platforms
Integrator Platform
Product Platform
Multi-sided Platform
Why is it hard for key platers to be overcome?
They exploit interdependencies, complementarities, and interoperabilities to increase barriers to entry
How does network economics explain the success of API business models?
What are challenges that organizations face when using Big Data/AI?
Opacity of AI
Processing power does not match amount of data
Paradox of digital technologies (regulative regimes)
Collection of valuable datasets
Name 3 examples of fixed pricing and explain
Penetration Pricing
Price Skimming
Loss Leader
Price Leadership
Premium or Prestige Price
Price Lining
Odd-Even Pricing
Describe the value smart contracts provide to companies & the supply chain
System becomes more efficient, immutable, traceable, resilient, distributed, and non-repudiated because the contracts are exchanged automatically through triggered events and don't require third-party support
What are the 2 aspects network economics helps to explain?
1. barriers to entry associated with level of use and adoption in the digital economy
2. dynamics of competition in digital economy
Explain how Network Economics creates long-term value creation. How does ICT help with this?
Network effects increases the size of the market creating new opportunities for revenues and business for firms while also increasing individual value garnered by the users who interact with the system.
Value creation is the result of how resources are combined, with the support of ITs, to produce goods with specific properties that emit value when exchanged.
Introduction of ICT and innovative products attracts a larger market and interested users. ICT can also expand the scope of the network through this, attracting more sellers and more buyers.
What value can AI and Big Data provide to companies? What must they understand for true success?
Ability to understand what is happening in their business, how to respond, and how to anticipate for potential first mover advantage. Algorithms can create an order of reality around clusters that is easier for organizations to digest. Fully assessing the algorithm, and understanding how it translates interactions into insights, will guarantee that companies understand the extent of value created.
Explain the relationship between data-driven/ machine learning models and pricing.
stat/quant techniques are used to determine customer preferences to identify patterns and dynamic pricing
can result in segmentation through the use of AI, business intelligence, etc.
Why are projects no longer "IT" projects? Explain this through the concepts of value chain and orchestration.
IT is no longer a siloed, vertical component. Instead, it's distributed between primary and supportive activities in the value chain. Managers must understand how the IT that is pervasive in all of these activities integrate together to maximize value.