I served as cocounsel in class action litigation challenging Apple charging users for purchases made by kids, refusing refunds to such users, and allowing purchases (and charging users’ credit cards) without users reentering their passwords to authorize the purchases. In response, Apple agreed to grant refunds to customers who so requested.
In Re In-App Purchase Litigation, Case No. 5:11-CV-01758-EJD (N.D. Cal.)
Coles, Peter, and Benjamin Edelman. “The Online Economy: Strategy and Entrepreneurship — Course Architecture Note.” Harvard Business School Course Overview Note 911-069, April 2011. (Revised February 2015.) (educator access at HBP. request a courtesy copy.)
This note provides an overview of the Harvard Business School course “The Online Economy: Strategy and Entrepreneurship.” It covers the framework for the course, key principles within each course module, and a synopsis of each case, along with the lessons the case is meant to convey.
Coles, Peter, and Benjamin Edelman. “Mobilizing Networked Businesses — Module Note.” Harvard Business School Course Overview Note 911-048, March 2011. (Revised February 2015.) (educator access at HBP. request a courtesy copy.)
This module note presents six strategies for mobilizing networked businesses.
Edelman, Benjamin, and Scott Duke Kominers. “Online Marketing at Big Skinny.” Harvard Business School Case 911-033, February 2011. (Revised February 2012.) (educator access at HBP. request a courtesy copy.)
Describes a wallet maker’s application of seven Internet marketing technologies: display ads, algorithmic search, sponsored search, social media, interactive content, online distributors, and A/B testing. Provides concise introductions to the key features of each technology, and asks which forms of online marketing the company should prioritize in the future. Discusses similarities and differences between online and off-line marketing, as well as issues of marketing campaign evaluation.
Supplement:
Online Marketing at Big Skinny slide supplement – PowerPoint Supplement (HBP 912006)
Teaching Materials:
Online Marketing at Big Skinny – Teaching Note (HBP 911034)
Edelman, Benjamin. “Bias in Search Results?: Diagnosis and Response.” Indian Journal of Law and Technology 7 (2011): 16-32.
I explore allegations of search engine bias, including understanding a search engine’s incentives to bias results, identifying possible forms of bias, and evaluating methods of verifying whether bias in fact occurs. I then consider possible legal and policy responses, and I assess search engines’ likely defenses. I conclude that regulatory intervention is justified in light of the importance of search engines in referring users to all manner of other sites, and in light of striking market concentration among search engines.
Edelman, Benjamin. “Adverse Selection in Online ‘Trust’ Certifications and Search Results.” Electronic Commerce Research and Applications 10, no. 1 (January-February 2011): 17-25.
Widely used online “trust” authorities issue certifications without substantial verification of recipients’ actual trustworthiness. This lax approach gives rise to adverse selection: the sites that seek and obtain trust certifications are actually less trustworthy than others. Using an original dataset on web site safety, I demonstrate that sites certified by the best-known authority, TRUSTe, are more than twice as likely to be untrustworthy as uncertified sites. This difference remains statistically and economically significant when restricted to “complex” commercial sites. Meanwhile, search engines create an implied endorsement in their selection of ads for display, but I show that search engine advertisements tend to be less safe than the corresponding organic listings.
Edelman, Benjamin. “The iPhone at IVK.” Harvard Business School Teaching Note 911-414, October 2010. (educator access at HBP.)
Teaching Note for The iPhone at IVK.
Edelman, Benjamin. “Least-Cost Avoiders in Online Fraud and Abuse.” IEEE Security & Privacy 8, no. 4 (July-August 2010): 78-81.
Web users face considerable fraud, malfeasance, and economic harm that system operators could prevent or mitigate. Although the legal system can respond, regulations have mixed results. I examine the applicable legal rules that constrain online fraud and the economic underpinnings to identify whether those rules assign responsibility to the parties best positioned to take action.
Edelman, Benjamin. “The Pathologies of Online Display Advertising Marketplaces.” Art. 2. SIGecom Exchanges (June 2010).
Display advertising marketplaces place “banner” ads on all manner of popular sites. While these services are widely used, they suffer significant challenges, including weak user response and low accountability for both advertisers and web site publishers. I survey a few major challenges, flagging possible areas for future research.
Edelman, Benjamin, and Michael Schwarz. “Optimal Auction Design and Equilibrium Selection in Sponsored Search Auctions.” American Economic Review 100, no. 2 (May 2010): 597-602. (First circulated in 2006 as Optimal Auction Design in a Multi-unit Environment: The Case of Sponsored Search Auctions. Reprinted in The Economics of E-Commerce, Michael Baye and John Morgan, editors, 2016.)
We characterize the optimal (revenue maximizing) auction for sponsored search advertising. We show that a search engine’s optimal reserve price is independent of the number of bidders and independent of the rate at which click-through rate declines over positions. We separate the effects of reserve price increases into direct effects (on the low bidder) and indirect effects (on others), and we show that most of the incremental revenue from setting reserve price optimally comes from indirect effects.