1. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 1 Owenership and Subjective Value in the Trading of Information: Trading Expertise vs. Content, Copies vs. Originals

2. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 2 Value of Information Value judgments about information and its value are vital for a vibrant, functioning information society Value judgments about information and its value are vital for a vibrant, functioning information society Information is costly to produce but very cheap to reproduce. Information is costly to produce but very cheap to reproduce. It is therefore difficult to assess its value.

3. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 3 Value of Information (2) Theoretically, there are three ways to assess the value of information Normative, realistic, and subjective. Theoretically, there are three ways to assess the value of information Normative, realistic, and subjective. Utility varies by person and circumstance. Utility varies by person and circumstance. Information is an “ experience good ”, the value of which is revealed only after use Information is an “ experience good ”, the value of which is revealed only after use  The value of information is subjective.

4. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 4 Value of Information (3) The (subjective) value of information is enigmatic, intriguing, and worth studying The (subjective) value of information is enigmatic, intriguing, and worth studying We use the “ Endowment Effect ” approach to examine the subjective value of information We use the “ Endowment Effect ” approach to examine the subjective value of information

5. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 5 The Endowment Effect WTA – Willingness to Accept (sell) WTA – Willingness to Accept (sell) WTP – Willingness to Purchase (buy) WTP – Willingness to Purchase (buy) WTA/WTP WTA/WTP Theoretically: WTA/WTP  1 Theoretically: WTA/WTP  1 Research uncovers a disparity whereby the ratio is between 3 (private goods) and 10 (public goods). Research uncovers a disparity whereby the ratio is between 3 (private goods) and 10 (public goods).

6. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 6 The Endowment Effect (2) The main psychological explanation of the WTA/WTP disparity is loss aversion which is based on Prospect Theory The main psychological explanation of the WTA/WTP disparity is loss aversion which is based on Prospect Theory (Kahneman, Knetsch et al. 1990; Thaler 1991; Bateman, Munro et al. 1997) The main economic explanations are the substitution effect The main economic explanations are the substitution effect (Hanemann 1991; Shogren, Shin et al. 1994), the tradeoff between the price of information and the expected payoff (Kolstad and Guzman 1999) and intrinsic value (Boyce, Brown et al. 1992).

7. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 7 The Endowment Effect (3) Does it apply to information? If so, how? Where is information on the WTA/WTP continuum? Does it apply to information? If so, how? Where is information on the WTA/WTP continuum?

8. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 8 The Experiment Buy or sell information by placing a bid for it in a business game: a Lemonade Stand Buy or sell information by placing a bid for it in a business game: a Lemonade Stand DVs: WTA and WTP DVs: WTA and WTP IVs: Source nature (2 levels) and IVs: Source nature (2 levels) and source status (2 levels) source status (2 levels) Design: 2X2X2 Design: 2X2X2 294 students 294 students See game materials here: http://ValueofInformation.rafaeli.net See game materials here: http://ValueofInformation.rafaeli.net http://ValueofInformation.rafaeli.net

9. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 9

10. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 10 Results (1) The experiment yielded two WTA values and two WTP values of the weather information for each participant. The experiment yielded two WTA values and two WTP values of the weather information for each participant. The present results reveal that the WTA/WTP ratio for weather information in the Lemonade simulation is about 3 and that there was a strong preference to play with information. The present results reveal that the WTA/WTP ratio for weather information in the Lemonade simulation is about 3 and that there was a strong preference to play with information.

11. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 11

12. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 12 Results (2) The WTA/WTP ratio diverges from unity more often and more pronouncedly for ORIGINAL (3) rather than COPIES (2). The WTA/WTP ratio diverges from unity more often and more pronouncedly for ORIGINAL (3) rather than COPIES (2). Even for copies the ratio is still double. Even for copies the ratio is still double. People are sensitive to originality not to the source. People are sensitive to originality not to the source.

13. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 13 Test Value=3Test Value=1 Std. Dev. Mean Ratio Sig.t t 0.46-0.730.006.373.452.79 Orig. Cont. 0.31-1.030.006.953.012.74 Orig. Expt. 0.00-4.270.004.602.762.04 Copy Cont. 0.00-6.070.004.532.271.85 Copy Expt. Table 1: Results for one-sample t-tests comparing the means of the ratios for original and copy content and expertise to values of 1 and of 3.

14. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 14 Sig.t Std. Dev. Mean Ratio 0.003.64 3.242.77 Original Content and Expertise 2.531.95 Copy Content and Expertise Table 3: Results for a paired samples t-test comparing the means of the ratios for original and copy content and expertise.

15. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 15 Discussion A high (too high?) overall subjective value for information. A high (too high?) overall subjective value for information. As predicted by the Endowment Effect theory, WTA for information was significantly larger than WTP for information As predicted by the Endowment Effect theory, WTA for information was significantly larger than WTP for information This predicts undertrading This predicts undertrading

16. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 16 Discussion (2) Information is a commodity. Nevertheless, information is still easier to duplicate, easy to share, and ownership of it proves more difficult to enforce Information is a commodity. Nevertheless, information is still easier to duplicate, easy to share, and ownership of it proves more difficult to enforce Society has not yet adjusted its information consumption patterns to the present situation of information abundance Society has not yet adjusted its information consumption patterns to the present situation of information abundance

17. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 17 Further Work We have just completed work on information sharing where we added an instant messaging application to the Lemonade Stand game. We have just completed work on information sharing where we added an instant messaging application to the Lemonade Stand game. Ownership emerges as an important antecedent for sharing behavior as well. Ownership emerges as an important antecedent for sharing behavior as well. Collaboration? We have run our simulations in various universities in Israel and abroad and are glad to collaborate. If you ’ d like to spice up your classes with this simulation please call! Collaboration? We have run our simulations in various universities in Israel and abroad and are glad to collaborate. If you ’ d like to spice up your classes with this simulation please call!

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19. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 19 Some related work… Rafaeli, S. & Raban, D.R. (2003) The Subjective Value of Information : Trading expertise vs. content, copies vs. originals in E-Business, Proceedings of the The Third International Conference on Electronic Business (ICEB 2003), Singapore Rafaeli, S. & Raban, D.R. (2003) The Subjective Value of Information : Trading expertise vs. content, copies vs. originals in E-Business, Proceedings of the The Third International Conference on Electronic Business (ICEB 2003), Singapore Rafaeli, S. & Raban D.R. (2003) Experimental Investigation of the Subjective Value of Information in Trading, Journal of the Association for Information Systems (JAIS), Vol. 4:5 pp. 119-139 Rafaeli, S. & Raban D.R. (2003) Experimental Investigation of the Subjective Value of Information in Trading, Journal of the Association for Information Systems (JAIS), Vol. 4:5 pp. 119-139SIMULATIONS Rafaeli, S., Raban, D. Ravid, G. and Noy, A. (2003) Online Simulations in Management Education about Information and its Uses, in Charles Wankel and Robert Defillipi Educating Managers with Tomorrow's Technologies Vol. 2 in: Research in Management Education and Development, Information Age Publishing, pp. 53- 80 Rafaeli, S., Raban, D. Ravid, G. and Noy, A. (2003) Online Simulations in Management Education about Information and its Uses, in Charles Wankel and Robert Defillipi Educating Managers with Tomorrow's Technologies Vol. 2 in: Research in Management Education and Development, Information Age Publishing, pp. 53- 80Educating Managers with Tomorrow's TechnologiesEducating Managers with Tomorrow's Technologies

20. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 20 Some related work… (2) COMMODIFICATION OF INFORMATION Two Cheers for the Commodification of Information Journal of Intellectual Property Law, Special Issue, June 27, 2001 Two Cheers for the Commodification of Information Journal of Intellectual Property Law, Special Issue, June 27, 2001 Two Cheers for the Commodification of Information Two Cheers for the Commodification of Information VALUE OF INFORMATION Shapiro, C. and H. R. Varian (1999). Information Rules: A Strategic Guide to the Network Economy. Boston, Harvard Business School Press. Shapiro, C. and H. R. Varian (1999). Information Rules: A Strategic Guide to the Network Economy. Boston, Harvard Business School Press.DISINTERMEDIATION Rafaeli, S. & Ravid, G. (2003) Information sharing as enabler for the virtual team: an experimental approach to assessing the role of electronic mail in disintermediation. In Information Systems Journal, Vol. 13, pp. 191-206 Rafaeli, S. & Ravid, G. (2003) Information sharing as enabler for the virtual team: an experimental approach to assessing the role of electronic mail in disintermediation. In Information Systems Journal, Vol. 13, pp. 191-206 KNOWLEDGE MANAGEMENT AND SHARING Rafaeli, S., Barak, M., Dan-Gur, Y. and Toch, E. (2004) QSIA - A Web-based environment for learning, assessing and knowledge sharing in communities, Computers and Education (in press). Rafaeli, S., Barak, M., Dan-Gur, Y. and Toch, E. (2004) QSIA - A Web-based environment for learning, assessing and knowledge sharing in communities, Computers and Education (in press). Barak, M. & Rafaeli, S. (2004, in press) Online Question-Posing and Peer-Assessment as Means for Web-based Knowledge Sharing in Learning, International Journal of Human-Computer Studies (in press ) Barak, M. & Rafaeli, S. (2004, in press) Online Question-Posing and Peer-Assessment as Means for Web-based Knowledge Sharing in Learning, International Journal of Human-Computer Studies (in press ) SOCIAL FACILITATION Rafaeli, S. & Noy, A. (2002), Online auctions, messaging, communication and social facilitation: a simulation and experimental evidence, European Journal of Information Systems, September 2002, vol. 11, no. 3, pp. 196-207. Rafaeli, S. & Noy, A. (2002), Online auctions, messaging, communication and social facilitation: a simulation and experimental evidence, European Journal of Information Systems, September 2002, vol. 11, no. 3, pp. 196-207.

21. February 2004 Daphne Raban and Sheizaf Rafaeli InfoSoc 21 Less related work… (3) ONLINE COMMUNITIES Rafaeli, S. and Sudweeks, F.: 1998, Interactivity on the Net, in Rafaeli, S., Sudweeks, F. and McLaughlin (eds), Network and Netplay: Virtual Groups on the Internet, MIT Press. (see also JCMC, Vol 2, 4 http://www.ascusc.org/jcmc/vol2/issue4/rafaeli.sudweeks.html ) Rafaeli, S. and Sudweeks, F.: 1998, Interactivity on the Net, in Rafaeli, S., Sudweeks, F. and McLaughlin (eds), Network and Netplay: Virtual Groups on the Internet, MIT Press. (see also JCMC, Vol 2, 4 http://www.ascusc.org/jcmc/vol2/issue4/rafaeli.sudweeks.html ) http://www.ascusc.org/jcmc/vol2/issue4/rafaeli.sudweeks.html Jones, Q., Ravid, G., and Rafaeli S. (2001) Information Overload and Virtual Public Discourse Boundaries. In: Hirose, M. (Ed.), INTERACT'01, Eighth IFIP TC.13 Conference on Human-Computer Interaction, Tokyo, Japan: IOS Press, 2001 Jones, Q., Ravid, G., and Rafaeli S. (2001) Information Overload and Virtual Public Discourse Boundaries. In: Hirose, M. (Ed.), INTERACT'01, Eighth IFIP TC.13 Conference on Human-Computer Interaction, Tokyo, Japan: IOS Press, 2001Information Overload and Virtual Public Discourse Boundaries. Information Overload and Virtual Public Discourse Boundaries. Gordon,M., Fan,W., Rafaeli,S.,Wu,H.and Farag,N.(2003) The architecture of commKnowledge:combining link structure and user actions to support an online community', International Journal of Electronic Business,Vol.1, No.1, pp.69-82. Gordon,M., Fan,W., Rafaeli,S.,Wu,H.and Farag,N.(2003) The architecture of commKnowledge:combining link structure and user actions to support an online community', International Journal of Electronic Business,Vol.1, No.1, pp.69-82. Rafaeli, S., Ravid, G., & Soroka, V. (2004) De-lurking in virtual communities: a social communication network approach to measuring the effects of social and cultural capital, Proceedings of the 2004 Hawaii International Conference on System Sciences (HICSS 37) Collaboration Systems and Technology Track. Copyright 2004 IEEE. Published in the Proceedings of the Hawai'i International Conference on System Sciences, January 5 – 8, 2004, Big Island, Hawaii. Rafaeli, S., Ravid, G., & Soroka, V. (2004) De-lurking in virtual communities: a social communication network approach to measuring the effects of social and cultural capital, Proceedings of the 2004 Hawaii International Conference on System Sciences (HICSS 37) Collaboration Systems and Technology Track. Copyright 2004 IEEE. Published in the Proceedings of the Hawai'i International Conference on System Sciences, January 5 – 8, 2004, Big Island, Hawaii.De-lurking in virtual communities: a social communication network approach to measuring the effects of social and cultural capitalDe-lurking in virtual communities: a social communication network approach to measuring the effects of social and cultural capital