Three applications of economic theory and methodology in information systems research

Abstract

In this thesis, three IS research problems: competition and compatibility between open source and proprietary software, IT investment value, advertising and signaling in eBay, are investigated from an economic perspective. The first study focuses on the compatibility choices of a proprietary software producer when it competes with an open source software provider. It is found that the best compatibility strategy for the proprietary software producer depends on the market coverage conditions. The second study uses the event study methodology of economics to examine whether IT investments can pay off. The third study aims to examine whether the optional features in eBay, such as Gallery, are advertising tools or quality signals. These three studies demonstrate that economic theory and methodology can be used effectively in IS research to address problems related to IT and its application in e-commerce.