While FTC guidelines call for “clear” and “prominent” visual cues to separate advertisements from algorithmic results, Google has moved in the opposite direction — eliminating distinctive colors that previously helped distinguish advertisements from other search results.
Google Inc. in 2014 (teaching materials) with Thomas Eisenmann
Edelman, Benjamin, and Thomas R. Eisenmann. “Google Inc. in 2014.” Harvard Business School Case 915-004, September 2014. (Revised June 2017.).(educator access at HBP.)
Describes Google’s history, business model, governance structure, corporate culture, and processes for managing innovation. Reviews Google’s recent strategic initiatives and the threats they pose to selected competitors. Asks what Google should do next.
Supplements:
Google Inc. in 2014 (Abridged) – Case (HBP 915005)
Google Inc. in 2014 Role Supplement – Supplement (HBP 915017)
Teaching Materials:
Google Inc. in 2014 and Google Inc. in 2014 (Abridged) – Teaching Note (HBP 915011)
Virgin Atlantic – price advertising violations
Complaint. Answer. Docket and public comments.
Status: Consent order. $30,000 penalty.
Summary: mischaracterizing surcharges as “tax”
Price Restrictions in Multi-sided Platforms: Practices and Responses
Edelman, Benjamin, and Julian Wright. “Price Restrictions in Multi-sided Platforms: Practices and Responses.” Competition Policy International 10, no. 2 (Fall 2014).
In connecting buyers to sellers, some two-sided platforms require that sellers offer their lowest prices through the platform, disallowing lower prices for direct sales or sales through competing platforms. In this article, we explore the various contexts where such restrictions have arisen, then consider effects on competition, entry, and efficiency. Where there are plausible mitigating factors, such as efficiencies from platforms’ price restrictions, we explore those rationales and compare them to the harms. We identify a set of responses for competition policy, look at experiences to date, and suggest some future attempts to improve the functioning of these markets.
Pivots and Incentives at LevelUp (teaching materials) with Karen Webster
Edelman, Benjamin, and Karen Webster. “Pivots and Incentives at LevelUp.” Harvard Business School Case 915-001, August 2014. (Revised March 2015.) (educator access at HBP. request courtesy copy.)
LevelUp’s mobile payments service lets users scan a smartphone barcode rather than swipe a credit card. Will consumers embrace the service? Will merchants? LevelUp considers adjustments to make the service attractive to both consumers and merchants, while trying to accelerate deployment at reasonable cost.
Teaching Materials:
Pivots and Incentives at LevelUp – Teaching Note (HBP 915015)
Optimization and Expansion at OpenTable (teaching materials) with Karen Webster
Edelman, Benjamin, and Karen Webster. “Optimization and Expansion at OpenTable.” Harvard Business School Case 915-003, August 2014. (Revised March 2015.) (educator access at HBP. request courtesy copy.)
OpenTable considers adjustments to increase its benefits to merchants, including a novel payments service that lets customers skip the multi-step process of using a credit card.
Supplement:
Optimization and Expansion at OpenTable – PowerPoint Supplement (HBP 910010)
Teaching Materials:
Optimization and Expansion at OpenTable – Teaching Note (HBP 915013)
Convergence of Position Auctions under Myopic Best-Response Dynamics
Cary, Matthew, Aparna Das, Benjamin Edelman, Ioannis Giotis, Kurtis Heimerl, Anna Karlin, Scott Duke Kominers, Claire Mathieu, and Michael Schwarz. “Convergence of Position Auctions under Myopic Best-Response Dynamics.” ACM Transactions on Economics and Computation 2, no. 3 (July 2014): 1-20.
We study the dynamics of multi-round position auctions, considering both the case of exogenous click-through rates and the case in which click-through rates are determined by an endogenous consumer search process. In both contexts, we demonstrate that the dynamic auctions converge to their associated static, envy-free equilibria. Furthermore, convergence is efficient, and the entry of low-quality advertisers does not slow convergence. Because our approach predominantly relies on assumptions common in the sponsored search literature, our results suggest that dynamic position auctions converge more generally.
Distribution at American Airlines (teaching materials)
Edelman, Benjamin. “Distribution at American Airlines (A).” Harvard Business School Case 909-035, January 2009. (Revised June 2009.) (educator access at HBP. request a courtesy copy.)
American Airlines sought to reduce the fees it pays to global distribution services (GDSs)–such as SABRE–to reach travel agents. But GDSs held significant tactical advantages. For example, GDSs had signed long-term exclusive contracts with the corporate customers who were American’s best customers. Furthermore, travel agents tended to favor whichever GDS offered the highest commissions–impeding price competition among GDSs. Against this backdrop, American considered how best to cut its GDS costs.
Supplements:
Distribution at American Airlines (B) – Supplement (HBP 909036)
Distribution at American Airlines (C) – Supplement (HBP 913034)
Distribution at American Airlines (D) – Supplement (HBP 913035)
Teaching Materials:
Distribution at American Airlines (A-D) – Teaching Note (HBP 909059)
Distribution at American Airlines – Slide Supplement (HBP 914039)
Objections to Tentative Decision and Order to Show Cause (IATA 787)
Edelman, Benjamin. “Objections to Tentative Decision and Order to Show Cause (IATA 787).” June 2014. (Before the Department of Transportation.)
I critique Order 2014-5-7 (Docket No. DOT-OST-2013-0048-0415) to the extent that the DOT permits, or purports to permit, airlines to sell tickets other than in accordance with published tariffs. I argue that tariffs provide important benefits to passengers and should be continued notwithstanding the proposed IATA Resolution 787.
Pitfalls and Fraud in Online Advertising Metrics: What Makes Advertisers Vulnerable to Cheaters, and How They Can Protect Themselves
Edelman, Benjamin. “Pitfalls and Fraud in Online Advertising Metrics: What Makes Advertisers Vulnerable to Cheaters, and How They Can Protect Themselves.” Journal of Advertising Research 54, no. 2 (June 2014): 127-132.
How does online advertising become less effective than advertisers expect and less effective than measurements indicate? The current research explores problems that result, in part, from malfeasance by outside perpetrators who overstate their efforts to increase their measured performance. In parallel, similar vulnerabilities result from mistaken analysis of cause and effect–errors that have become more fundamental as advertisers target their advertisements with greater precision. In the paper that follows, the author attempts to identify the circumstances that make advertisers most vulnerable, notes adjusted contract structures that offer some protections, and explores the origins of the problems in participants’ incentives and in legal rules.