Alex Tuzhilin
Department of Information Systems
Stern School of Business
New York University
e-mail: atuzhili@stern.nyu.edu

ABSTRACT: A new knowledge-discovery framework, called Data Monitoring and Discovery Triggering (DMDT), is defined, where the user specifies monitors that "watch" for significant changes to the data and changes to the user-defined system of beliefs. Once these changes are detected, knowledge discovery processes, in the form of data mining queries, are triggered. The proposed framework is the result of an observation, made in the previous work of the authors, that when changes to the user-defined beliefs occur, this means that there are interesting patterns in the data. In this paper, we present an approach for finding these interesting patterns using data monitoring and belief-driven discovery techniques. Our approach is especially useful in those applications where data changes rapidly with time, as in some of the On-Line Transaction Processing (OLTP) systems. The proposed approach integrates active databases, data mining queries and subjective measures of interestingness based on user-defined systems of beliefs in a novel and synergetic way to yield a new type of data mining systems.

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Ajit Kambil
Department of Information Systems
Stern School of Business
New York University
e-mail: akambil@stern.nyu.edu

March 1, 1996

ABSTRACT: The Internet and similar networks provide new infrastructures for communications and commerce. These open networks interconnect computers across many different organizations with dramatically lower communications and distributed applications development costs. This motivates businesses to transfer commercial activity from closed private networks to open networks like the Internet.

However, open network architectures are vulnerable to a number of different security threats. While many different hardware and software solutions exist to secure transactions over the Internet, greater consensus is required by companies and consumers on the processes, organizations and application of existing technical solutions for secure electronic commerce. Greater consensus on security among trading parties will lower the costs of electronic commerce and accelerate its deployment on the Internet.

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Ajit Kambil
Department of Information Systems
Stern School of Business
New York University
e-mail: akambil@stern.nyu.edu

Eric van Heck
Tilburg University
The Netherlands

Revised November 1996

ABSTRACT: This paper specifies a generalizable model of exchange processes and develops a process-stakeholder analysis framework to evaluate alternative market designs. This framework is applied to analyze a number of information technology initiatives in the Dutch flower markets. The Dutch flower auctions are the world's leading centers for trading cut-flowers and potted plants. We undertake a cross-case analysis and apply our framework to analyze successes and failures in the introduction of new IT-based trading mechanisms in these markets. Based on our study, we develop a number of testable propositions on: the separation of physical and informational processes in trading, the responses of stakeholders to changes in available information due to IT initiatives, and economic and incentive conditions required for adoption of new trading processes. Finally, our detailed cases illustrate the institutional and incentive constraints, and complexities encountered in the introduction of new electronic markets.

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Ajit Kambil
Department of Information Systems
Stern School of Business
New York University
e-mail: akambil@stern.nyu.edu

ABSTRACT: Advances in information technologies enable firms to expand electronic commerce - the exchange of valuable information, goods and services across electronic media. This paper looks at how businesses are adopting and using technologies like the Internet and World-Wide Web for electronic commerce. I propose that electronic commerce will dramatically reduce transactions costs requiring managers to redevelop their firm's strategy to focus on more fundamental sources of competitive advantage. I identify responses required to compete in a low transactions cost environment and provide illustrative examples of firms executing such a strategy.

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Henry C. Lucas, Jr.
Department of Information Systems
Stern School of Business
New York University
hlucas@stern.nyu.edu

ABSTRACT: Information technology (IT) is changing the nature of organizations and the way all of us work. IT design variables make it possible to create new organization structures and new modes of operation. The second-order impact of these new types of organizations and working arrangements is on physical space: virtual organizations, highly mobile work forces and electronic commerce will change the demand for and nature of office, retail and industrial space. Yet a third-order impact of this technology will be changes in cities, suburbs and rural areas brought about by these new trends in space.

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Ajit Kambil Department of Information Systems akambil@stern.nyu.edu

Ari Ginsberg
Department of Management
aginsber@stern.nyu.edu

Michael Bloch
University of Lausanne,
Switzerland

ABSTRACT: While many managers face the challenge of lower profits in increasingly competitive and commoditized industries, a few firms break out as market value leaders generating superior growth and shareholder returns. How do these firms break out of the commoditization trap? In this paper we propose these firms invest unique value propositions and offer them in superior ways to their customers. Based on our study of a number of market leaders, we provide a framework for systematically understanding and reinventing the firm's value propositions. We propose that clearly understanding and defining the dimensions of a firm's value proposition is a critical first step in building an effective strategy.

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Ajit Kambil
Arnold Kamis
Marios Koufaris
Henry C. Lucas, Jr.
Department of Information Systems
Stern School of Business
New York University
akambil@stern.nyu.edu, akamis@stern.nyu.edu, mkoufari@stern.nyu.edu, hlucas@stern.nyu.edu

November 1996

ABSTRACT: This paper examines the variables associated with a firm having a site on the World Wide Web and with the site's characteristics. We predict that company leadership and strategy, firm resources and the need to communicate with the public are associated with the presence of Web sites and their characteristics. To test the predictions, we use data from the Business Week 1000 largest firms in the US, two year's of chairmens' annual report letters, and a survey of Web sites. The results show that firm leadership and strategy is the strongest predictor of having a Web site and its characteristics. Firm resources and the need to communicate are also positively associated with Web sites. The presence of a Web site and its evaluation appear to be independent of industry classification. We explore the implications of the results for firm strategy toward the adoption of technological innovations.

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Henry C. Lucas, Jr.
Department of Information Systems
Stern School of Business
New York University
hlucas@stern.nyu.edu

ABSTRACT: It is difficult for the firm investing in information technology (IT) to appropriate all of the benefits from its investment for itself: it is very easy to imitate innovations in IT. Airlines have installed computerized reservations systems (CRSS) in travel agencies in order to appropriate the returns from their investments in information technology. The airlines expected to obtain a number of benefits from this strategy including increased efficiency, possible bias in favor of the CRS owner on the part of the travel agent, and fees from other airlines for making reservations for them. The purpose of this paper is to evaluate the impact of the indirect (non-fee) benefits to CRS owners from deploying systems in travel agencies. These indirect benefits should be seen in the vendor airline's market share between cities and in the overall performance of the airline at an industry level. This paper models airline performance as a function of CRS ownership at two levels: for selected city-pairs and at the overall level of the firm. The city-pair analysis employs a multinomial logit market share model using five years of data on 72 routes. The industry model uses longitudinal data for a panel of ten airlines for twelve years. The results of both analyses support hypotheses that CRS ownership is positively related to airline performance. It appears that strong airlines have appropriated the indirect benefits of their CRSs, turning them into highly specialized assets for further travel-related innovation.

Keywords: Appropriability, agency automation, airline performance, business value of IT, computerized reservation systems, CRS, corporate strategy, market share models.

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Balaji Padmanabhan Shahana Sen (Fordham University, New York City) Roger Stein Alexander Tuzhilin Norman H. White bpadmana@stern.nyu.edu, rstein@stern.nyu.edu, atuzhili@stern.nyu.edu, nwhite@stern.nyu.edu

Department of Information Systems
Stern School of Business
New York University

ABSTRACT: We discuss information needs of marketers on the World Wide Web and present a classification of types of information one can possibly get about Web site visits based on its ease of gathering. We then analyze how information needs can be satisfied using different categories of information gathered with these varying degrees of ease. We conclude that, although some of the information needs of marketers can be satisfied using data that can be automatically gathered with state-of-the-art Web tracking methods, many others cannot. We also discuss relevant issues and potential solutions to this problem.

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Henry C. Lucas, Jr. Valerie Spitler Department of Information Systems Stern School of Business New York University e-mail: hlucas@stern.nyu.edu, vspitler@stern.nyu.edu

ABSTRACT: This paper presents a field study of the Technology Acceptance Model. We extended this model to predict the acceptance of a multifunctional, broker workstation with a windowed interface. Brokers and sales assistants in the private client group of a major investment bank use this workstation as an integral part of their jobs. The extended model explains a significant percentage of the variance in usage, but the variables that are most salient in the model differ between brokers and sales assistants. There is evidence that low performing brokers use the workstation more than higher performing brokers; the results also suggest that more training may be needed for sophisticated workstations for professionals than for clerical personnel learning to use transactions processing systems. We believe it is important to predict and understand the acceptance of technology like the workstation in this study if firms are to obtain a return from investing in information technology.

This research was sponsored in part by National Science Foundation Grant Number IRI-9200205.

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Mark Ginsburg
Katherine Duliba
Department of Information Systems
Stern School of Business
New York University
e-mail: mginsbur@stern.nyu.edu, kduliba@stern.nyu.edu

Department of Information Systems
Stern School of Business
New York University

ABSTRACT: This paper considers collaborative software at the enterprise level, specifically Lotus Notes and alternatives which use World Wide Web (WWW) based technologies. We examine the strategic reasons, both short-term and long-term, motivating firms' choices in the decision phase and organizational issues in the implementation phase in four exploratory case studies. A thematic pair of related issues considered is the role of Internet standards and interoperability. Why are so-called "Open Systems" a major factor to some firms and not important to others? Why is the proprietary nature of Lotus Notes a stumbling block to some firms and a strategic advantage to others? We discuss enterprise-level groupware expectations and requirements to address these interesting questions. The final section focuses on predicting change to understand when an organization might reverse its initial enterprise-wide collaborative strategy.

Keywords: Enterprise-level groupware, Lotus Notes, Intranet, World Wide Web, Standards, Interoperability.

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Roy Radner Department of Information Systems Stern School of Business New York University e-mail: rradner@stern.nyu.edu

ABSTRACT: This paper is my response to a request for an account of "an economist's perspective on the organization of the firm." When faced with this request, I had three initial reactions. First, Oliver Hart had already written an interesting article (1989) with the same title, which, while presenting his own original point of view, also presented an excellent overview of the current ideas of economists on the subject. Second, my own perspective is probably more idiosyncratic than representative of the "generic economist," even though it is derived from such respectable authors as Arrow, Simon, Cyert, and March. Third, the subject is too vast for the confines of a short essay.

With these thoughts in mind, I decided to focus on two issues that have become increasingly apparent in attempts to apply the prevailing notions of "economic rationality" to the theory of the organization of business firms. The first goes under the rubric of bounded rationality. This is hardly a new idea, and has been forcefully brought to our attention in the work of Simon and others, although awareness of the problem (in economics) goes back at least to JM Clark (1918). I shall try to provide a more detailed taxonomy of bounded rationality than is usually done. In particular, it is important to distinguish between (1) cost rationality, like the costs of observation, communication, and even computation, that require only an extension of the standard Savage Paradigm and (2) truly bounded rationality, like not knowing the implications of everything that one knows, which - as far as I know - goes far beyond the Savage Paradigm.

The second issue, which I shall call indeterminacy, arises in attempts to apply the theory of strategic games to models of organizations: that is, one often faces a very large multiplicity of solutions, which significantly weakens or even destroys the predictive power of the theory. By solution I mean here the so-called noncooperative equilibrium, usually associated with the names of Auguste Cournot and John Nash (and extended and refined by John Harsanyi, Reingard Selten, and others to cover games in which the players have incomplete information). Although indeterminacy can arise even in static games with complete information, it seems to be especially prevalent in dynamic games and/or games with incomplete information.

Both of these issues have profound implications for the organization of the firm. In this paper, and given the current state of research on the subject, I can only sketch some of these implications. In particular, I argue that they provide added credibility to the managerial theory of the firm.

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Edward A. Stohr
Department of Information Systems
Stern School of Business
New York University
e-mail: estohr@stern.nyu.edu

J. Leon Zhao
School of Business and Management
Hong Kong University of Science and Technology
Hong Kong

ABSTRACT: Adapting workflow technologies to support process automation in business organizations is now on the top of the agenda in many organizations. We propose a conceptual model for technology adaptation in this area that stresses both technology-organization fit and technology-process fit. The goal of our study is to develop a systematic approach to business process automation that is adaptive to changes in organizational needs and is consistent with ideas of worker empowerment. In this paper we suggest a set of fundamental design variables for organizational (organic) and process (mechanistic) considerations. The technology adaptation model we develop is useful for technology providers in the workflow management area and for business managers who wish to take advantage of the new work-related technologies. The paper concludes with a number of suggestions for future research and development.

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Bruce W. Weber
Department of Information Systems
Stern School of Business
New York University
e-mail: bweber@stern.nyu.edu

July 1996

ABSTRACT: We use computer-based simulations of stock market as a background environment for experimental tests of the integration of an order-driven trading system into a dealer/quote-driven market. Experimental subjects traded using a traditional dealer quote screen (such as NASDAQ in the US or the London Stock Exchange's SEAQ), to which was added a public limit order facility. Data captured on subjects' trading decisions under different market structures revealed that: (1) When available, the limit order facility was used by the subjects, attracting some orders that would have otherwise gone to dealers, and reducing investor trading costs. (2) The relative use of market orders and limit orders was related to the bid-ask spread; wider spreads (higher costs of immediate trading) led subjects to fewer market orders. (3) Limit order use was reduced when the dealers were provided with an "informational advantage." (4) While the introduction of a limit order facility did not have a substantial effect on dealer profit margins, dealers' activities as a percentage of total market volume declined. Overall, we find the simulation environment is a workable device for analyzing the effect of market design changes on trader behavior and market quality. It can provide solid guidance on market structure issues, such as how best to incorporate a limit order facility in a competing dealer market.

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Department of Information Systems
Stern School of Business
New York University
email: tisakowi@stern.nyu.edu, akamis@stern.nyu.edu, mkoufari@stern.nyu.edu

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Tomas Isakowitz Department of Information Systems Stern School of Business New York University e-mail: tisakowi@stern.nyu.edu

ABSTRACT: This briefing focuses on design and development of WWW systems. I will present the principal elements of the Relationship Management Methodology which aids in the design and development of WWW applications. RMM will be introduced via a sample application. I will also, simultaneously, demonstrate a software tool, RM-CASE, that provides computerized support for RMM.

Keywords: hypertext, hypermedia, relational database display, design methodology, design guidelines, entity-relationship diagrams.

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Gabriel Gilabert
Nea Phronesis
Buenos Aires, Argentina
gabo@neap.satlink.net

Tomas Isakowitz
Department of Information Systems
Stern School of Business
New York University
tisakowi@stern.nyu.edu

Vanesa Maiorana
Universidad de Belgrano
Buenos Aires, Argentina
vanesa@maiorana.satlink.net

ABSTRACT: We present the design of a computer-aided environment, RMCase, to support the design and construction of WWW applications. RMCase supports hypermedia design and development activities and produces HTML code. Support for cognitive design processes is achieved through three fundamental premises at the foundation of RMCase: (1) fluid feedback loops between the various methodological stages, (2) manipulation of objects at the instance level, and (3) lightweight prototyping. As a result, RMCase will support bottom-up, top-down and middle-out software development styles.

Keywords: hypermedia design, software development, CASE

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Tomas Isakowitz
Department of Information Systems
Stern School of Business
New York University
e-mail: tisakowi@stern.nyu.edu

May 5, 1996

ABSTRACT: Hypermedia structuring and navigation requires design methodologies different from those developed for standard information systems. This article details our successful application of Relationship Management Methodology (RMM), a hypermedia systems analysis and design methodology, to ACM SIGLINK's LINKBase. LINKBase is a World-Wide Web (WWW) application, which dynamically generates WWW pages from a relational database containing information about hypertext-related events such as conferences, publications, authors, and sponsoring organizations. We describe our experience applying RMM in this case study, summarize design lessons we learned in the process, present extensions to RMM, and ground our work in hypermedia design literature. Our experiences should encourage hypermedia and WWW developers to utilize systematic design techniques.

Keywords: Hypertext, hypermedia, relational database display, hypermedia design methodology, design guidelines, Entity-Relationship Diagrams, navigation, indexes, guided tours, World-Wide Web database gateways, LINKBase, information access.

KSRL categories: AL0102, CB0601.05, CB0902.01, FB04, FC10, HA0903

Funding for this project was by NJIT under Grant #990967, the National Center for Transportation and Industrial Productivity under Grant #990905, Keywords: Hypertext, hypermedia, relational database display, hypermedia design methodology, design guidelines, Entity-Relationship Diagrams, navigation, indexes, guided tours, World-Wide Web database gateways, LINKBase, information access.

Keywords: Hypertext, hypermedia, relational database display, hypermedia design methodology, design guidelines, Entity-Relationship Diagrams, navigation, indexes, guided tours, World-Wide Web database gateways, LINKBase, information access.

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Katherine A. Duliba
Department of Information Systemse
Stern School of Business
New York University
e-mail: kduliba@stern.nyu.edu

Robert J. Kauffman (University of Minnesota)

ABSTRACT: Firms invest in information technology (IT) to create various kinds of leverage on firm profitability and performance. However, IT researchers have concentrated their efforts on the productivity impacts of technology, at the employee, process, firm, industry, and economy levels of analysis, to the exclusion of other business value impacts. Not captured by productivity metrics are the significant benefits that may accrue to the firm as product quality improves, managerial assessment of risk is enhanced, time to market and other time reductions are made, and new ways to control firm input and output prices become available to management. These kinds of impacts reflect price recovery improvements - the ratio of the prices of a firm's outputs (of good and services) to the prices of the inputs it consumes in productions - and they are rarely measured or understood in a systematic way. In this paper, we argue that it is appropriate to reconsider the current measurement and research agenda that aims to discover and document the payoffs that accrue from corporate investments in IT. We illustrate the extent to which IT investment may be motivated by management's understanding of the potential price recovery payoffs (even if they fail to carefully measure or report them) in the context of trading and treasury operations in international banking. We find that price recovery captures a previously unmeasured dimension of the business value of IT.

Keywords: Business value of IT, financial services, IT investment, international banking, productivity, price recovery, risk management

ISRL: BA0204, EF07, EI0205, EI0206, EL0302, EI0211.01, HB05, HB11

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Roy Radner
Department of Information Systems
Stern School of Business
New York University
e-mail: rradner@stern.nyu.edu

August 1996, Revised March 1997

ABSTRACT: In a diffusion model of an enterprise with variable scale, sufficient conditions are given for the maximization of expected profit (expected total discounted withdrawals) to lead to eventual bankruptcy with probability one. The optimal withdrawal policy is an "overflow policy," in which the withdrawal rate is equal to zero if the asset level is below a "barrier" and equal to the maximum rate if the asset level is greater than or equal to the barrier. The optimal policy for the control of the drift (yield) and volatility (risk) of the earnings process is derived as the solution of a differential equation, and a formula is given for the corresponding value function. The optimality of the constructed policy is demonstrated using the standard "Bellman Conditions."

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Timothy Van Zandt
Roy Radner
Department of Information Systems
Stern School of Business
New York University
e-mail: rradner@stern.nyu.edu

May 6, 1996

ABSTRACT: We study the properties of real-time decentralized information processing, as a model of human information processing in organizations, and use the model to understand how constraints on human information processing affect the returns to scale of firms. With real-time processing, decentralization does not unambiguously reduce delay, because processing a subordinate's report precludes processing current data. Because decision rules are endogenous, delay does not inexorably lead to eventually decreasing returns to scale; however, returns are more likely to be decreasing when computation constraints, rather than sampling costs, limit the information upon which decisions are conditioned. The results illustrate that the requirement of informational integration causes a breakdown of the replication arguments that are often used to establish non-decreasing returns.

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Roy Radner
Department of Information Systems
Stern School of Business
New York University
e-mail: rradner@stern.nyu.edu

October 1993; Revised, November 1996

ABSTRACT: We examine the proposition that competitive firms must behave as if they were maximizing profits; otherwise they would go bankrupt, or even fail to be financed in a competitive capital market. We investigate a model in which an entrepreneur raises funds for a risky enterprise on a competitive capital market, by offering a "divided policy" based on the realized (stochastic) flow of earnings. We show that an entrepreneur who maximizes the expected sum of discounted dividends is sure to fail in finite time. On the other hand, many other behaviors yield positive expected profits and are able to attract investment funds, and yet result in a positive probability of surviving forever. As a consequence, if new firms have sufficiently diverse behaviors, then even if there is a constant stream of new entrants, after a long time practically all of the surviving firms will not have been maximizing profits.

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Roger Stein Department of Information Systems Stern School of Business New York University e-mail: rstein@stern.nyu.edu

ABSTRACT: We adopt the view of organizations as information processing entities. As such, we propose that various exogenous and endogenous factors should affect the performance of organizations with respect to information processing tasks. We present a methodology for modeling organizational structures and for determining which organizational structures, if any, distinguish themselves given various constraints. Our methodology relies upon computer simulations that combine Monte Carlo methods and genetic algorithms to represent dynamic organizational operating environments and competition among firms, respectively.

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Curtis Dyreson
Department of Computer Science
James Cook University
Townsville, Q4811 Queensland, Australia
dyreson@cs.jcu.edu.au

Tomas Isakowitz
Department of Information Systems
Stern School of Business
New York University
e-mail: tisakowi@stern.nyu.edu

Christian S. Jensen
Department of Mathematics & Computer Science
Aalborg University,
DK-9220 Aalborg Ost, Denmark
csj@ised.au.uk

Richard T. Snodgrass
Department of Computer Science
University of Arizona
Tucson, Arizona 85721
rts@cs.arizona.edu

ABSTRACT: While "now" is expressed in SQL as CURRENT_TIMESTAMP within queries, this value cannot be stored in the database. However, this notion of an ever-increasing current-time value has been reflected in some temporal data models by inclusion of database-resident variables, such as "now," "until-changed," "¥" "@" and "-." Time variables are very desirable, but their use also leads to a new type of database, consisting of tuples with variables, termed a variable database.

This paper proposes a framework for defining the semantics of the variable databases of temporal relational data models. A framework is presented because several reasonable meanings may be given to databases that use some of the specific temporal variables that have appeared in the literature. Using the framework, the paper defines a useful semantics for such databases. Because situations occur where the existing time variables are inadequate, two new types of modeling entities that address these shortcomings, timestamps which we call now-relative and now-relative indeterminate, are introduced and defined within the framework. Moreover, the paper provides a foundation, using algebraic bind operators, for the querying of variable databases via existing query languages. This transition to variable databases presented here requires minimal change to the query processor. Finally, to underline the practical feasibility of variable databases, we show that database variables can be precisely specified and efficiently implemented in conventional query languages, such as SQL, and in temporal query languages, such as TSQL2.

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Department of Information Systems
Stern School of Business
New York University
e-mail: bpadmana@stern.nyu.edu, atuzhili@stern.nyu.edu ABSTRACT:

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Department of Information Systems
Stern School of Business
New York University
e-mail: dbodoff@stern.nyu.edu, akambil@stern.nyu.edu

ABSTRACT: The introduction of computerized post-coordination has solved many of the problems of pre-coordinated subject access. However, the adoption of computerized post-coordination results in the loss of some pre-coordination benefits. Specifically, the effect of hiding terms within the context of others is lost in post-coordination which gives lead status to every document term. This results in spurious matches of terms out of context. Library patrons and Internet searchers are increasingly dissatisfied with subject access performance, in part because of unmanageably large retrieval sets. The need to enhance precision and limit the size of retrieval sets motivates this work which proposes partial coordination, an approach which incorporates the advantages of computer search with the ability of pre-coordination to limit spurious partial matches and thereby enhance precision.

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