Research@Smith
SEPTEMBER 2007
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2
Marketing
How Consumers
Choose Products
4
Accounting
Sarbanes-Oxley’s
Effect on
Information Security
Disclosures
6
Electronic
Markets
Forecasting Online
Auction Dynamics
Research@Smith
VOL
NO
8 3
Research@Smith summarizes research conducted by the
faculty of the Robert H. Smith School of Business at the
University of Maryland.
Research@Smith is published three times a year by the
Robert H. Smith School of Business, University of Maryland;
3570 Van Munching Hall, College Park, MD 20742.
www.rhsmith.umd.edu
Dean
Howard Frank
Senior Associate Dean
G. Anandalingam
Director of Research
Michael Ball
Editor
Rebecca Winner
Contributing Writer
Sachin Agarwal, MBA ‘07
Design
Lori Newman
PhotographY
Vipul Bajpai, BSOS ‘04
Lisa Helfert, JOUR ‘92
We’d like to put Research@Smith directly into the hands of
faculty and administrators who are interested in learning
about the latest research conducted by Smith School
faculty. To request a copy of this publication or make an
address correction, contact the editor via e-mail, editor@
rhsmith.umd.edu, or phone, 301.405.9465.
Visit the Smith Research Network:
www.rhsmith.umd.edu/smithresearch/
Research@Smith
SEPTEMBER 2007
Forecasting Online Auctions VOL
NO
8 3
page 2
Research by Wolfgang Jank and Galit Shmueli
A new model accurately forecasts the dynamics and
end prices of online auctions.
Direct and Indirect Product Experiences
page 4
Research by Rebecca Hamilton
Consumers make more satisfactory product choices
when they are able to interact directly with products.
Information Security Disclosures After Sarbanes-Oxley
page 6
Research by Lawrence Gordon and Martin Loeb
The Sarbanes-Oxley Act is causing more companies
to disclose their information security activities.
Center for Electronic Markets and Enterprises page 8
Faculty Awards and Honors, New Faculty;
New Book; Featured Researchers
page 10
PhD Program
page 11
Faculty Research Profile: David Kirsch page 12
Forecasting
online auction
prices
A new model accurately forecasts
the dynamics and end prices of
online auctions.
W
ith the rise of eBay, online auctions have become
Traditional methods of forecasting prices are hard to
an everyday part of life for many people. In some
apply and are not very accurate for online auctions
sense, these auctions are a statistician’s dream,
because they don’t take into account the dramatic
containing a huge amount of publicly available data
changes in auction dynamics. Price changes in online
with literally millions of transactions taking place
auctions do not happen at a steady pace. Bids arrive
every day. A main feature of online auction data is the
in unevenly spaced time intervals, sometimes coming
change in dynamics of the bidding process, which
fast and furious and other times just a trickle.
can move very slowly at some points during the
Jank and Shmueli have accounted for the challenges
auction only to have a rapid flurry of bids just before
of unevenly spaced data by treating the price
the auction closes.
evolution in an auction as a functional object,
using a functional data framework with appropriate
Wolfgang Jank, associate professor of statistics,
smoothing techniques. This allows the model to
and Galit Shmueli, associate professor of statistics,
represent the extremely unevenly spaced series of bids
with Shanshan Wang, analyst with DemandTec, a
in a compact form, estimate price dynamics via the
California software firm, have developed a dynamic
derivatives of smooth functional objects and integrate
forecasting model to predict price in online auctions.
this dynamic information into the forecaster, and
The model operates during the live auction and
incorporate both static and time-varying information
forecasts price at a future time point during the
about the auction into the forecasting system.
auction as well as its final price. The model uses both
information available at the start of the auction, such
The authors used data from 190 seven-day auctions of
as opening price, product characteristics, and seller
both a high-priced item (a Microsoft Xbox) and a low-
reputation, as well as information only available after
priced item (the book Harry Potter and the Half-Blood
the auction starts, such as the amount of competition
Prince). For each auction they collected bid history to
and current price level.
learn the temporal order and magnitude of the bids.
This is the information typically used by traditional
forecasting models. But they also collected data on
the auction format, the product characteristics, and
seller attributes. The study was funded in part by a
grant from the National Science Foundation and a
grant from the Smith School’s Center for Electronic
Markets and Enterprises (CEME).
SEPTEMBER 2007 : VOLUME 8 : NUMBER 3
Galit Shmueli
Wolfgang Jank
Research by
and
“The innovative part of this model is not just that it
The ability to accurately predict online auction
measures where the price will end up, but how fast
dynamics, as well as the final auction price, has
the price is moving along this path,” says Jank. The
model produces forecasts with a low error rate, and
it outperforms standard forecasting methods, which
severely under-predict price evolution.
the potential to be a useful tool for both sellers
and purchasers.
Seller insurance also becomes possible with dynamic
price forecasting. “Imagine that you’re a seller
The ability to accurately predict online auction
planning to auction your iPhone on eBay. The
dynamics, as well as the final auction price, has the
company running the auction could use dynamic
potential to be a useful tool for both sellers and
forecasting to predict what the final price of the
purchasers. Dynamic price scoring would allow
auction would likely be, and give you the option to
auctions to be ranked by lowest expected price,
purchase insurance that would guarantee you would
which would in turn allow purchasers to focus their
at least receive a certain minimum price through
time and energy on just those few auctions that
the auction,” says Shmueli. “Because the model is
promise the lowest price. Companies that resell
dynamic, taking into account information as the
materials on eBay, known as eBay stores or trading
auction is ongoing, they could offer you one price for
assistants, could also make use of price forecasting.
insurance on the first day, and another on the second
These stores sell materials on behalf of individuals
or third day, depending on how the auction is going.”
who do not want to use eBay directly. Ongoing price
forecasting would allow these stores to pay their
“Explaining and Forecasting Online Auction Data
customers for their merchandise before the close of
Prices and Their Dynamics Using Funcational Data
the auction, in effect offering faster liquidation for
Analysis” was published in the Journal of Business
their customers.
and Economic Statistics. For more information,
contact wjank@rhsmith.umd.edu or
gshmueli@rhsmith.umd.edu.
RESEARCH@SMITH
Direct and
indirect product
experiences
Direct experiences with products help
customers choose the products with which
they will be most satisfied in the long run.
E
nter a big-box electronics store and you are
used a virtual digital music player, and then answered
likely to find customers poring over displays of cell
a series of questions that asked them to describe the
phones, digital music players and DVD players, trying
product. The authors then coded the participants’
to determine which product is right for them. Yet
thoughts to determine if they were focused on
despite their efforts, many of them will ultimately be
concrete details, such as how they would use the
unhappy with the product they take home.
product, or on more abstract themes, such as why
they would want to own the product.
The reason for their post-purchase dissatisfaction,
according to recent research at Smith, may lie in
The authors found that when consumers rely on
their pre-purchase evaluation of the product. Simply
product descriptions, and have not actually used a
reading product descriptions or seeing products on
product, they tend to focus more on the desirability
display may not provide enough of the right kind
of the product, rather than on how easy the product
of information—or the right kind of experience—to
will be to use. In contrast, after using a product,
allow customers to choose the product with which
customers become more focused on the usability
they will be most satisfied in the long-term.
of the product rather than on all of the things the
product can do for them. This means that consumers
Rebecca Hamilton, associate professor of marketing,
might prefer one product in the store, but prefer a
and Debora Viana Thompson, PhD ’06, of
different product once they bring it home and
Georgetown University, address this issue in their
begin using it.
paper “Is There a Substitute for Direct Experience?
Comparing Consumers’ Preferences after Direct and
Hamilton found that product experiences at the
Indirect Product Experiences.”
point of purchase seem to be critical in shaping
the customer’s product preferences. In one study,
In a series of studies conducted in the Smith School’s
participants were given the opportunity to use two
Netcentric Behavioral Lab, the authors examined the
models of a virtual digital music player—one that
effect of direct experiences, such as actually using a
offered more pre-loaded songs but was harder to
product, and indirect experiences, such as reading
use, and another that had fewer songs but was easier
a product description, on consumers’ purchasing
to use. After using both, the majority of participants
preferences. “We looked at the underlying thought
preferred the easier-to-use music player with fewer
process and were able to actually measure how
songs. Two weeks later, the same participants were
people were thinking about their choices,” says
asked to read product descriptions and then choose
Hamilton. In the studies, participants read about or
between the same two models of music players.
SEPTEMBER 2007 : VOLUME 8 : NUMBER 3
Research by
Rebecca Hamilton
Product experiences at the
point of purchase seem to be
critical in shaping the customer’s
product preferences.
To Hamilton’s surprise, this time they preferred the
direct experience. The authors note that successful
more desirable but harder-to-use music player with
interventions require more than rewriting product
more features. “We expected to find more evidence
descriptions. As their research shows, simply providing
for learning, and less of an effect based on the
more information about the product isn’t enough
context in which consumers made their choices, but
to resolve the discrepancy between consumers’
product experiences at the point of purchase were
preferences before and after purchasing.
very influential,” comments Hamilton.
Hamilton says that virtual experiences with products,
To combat buyer’s remorse, more and more
either online or in a product display, may also
companies are offering a ‘try-before-you-buy
help increase the consistency between consumers’
experience’ to consumers. At some stores that sell
preferences before and after use. On the Kodak
Maytag products, you can throw a load of dirty
Web site, potential camera purchasers can examine
laundry into a Maytag washer or bake a tray of
digital cameras in three dimensions, rotate them
cookies in a Maytag oven. REI staffers encourage
360 degrees, and view demos showing how to
campers to actually put up a tent before purchasing.
use each camera’s different modes and menus.
Encouraging consumers to imagine how they would
Providing a hands-on, point-of-purchase experience
use the product’s features step-by-step may produce
with their product may not be feasible for all
preferences more like those formed based on
manufacturers and retailers. But it is possible to
direct experiences.
manipulate consumers’ thought processes by
encouraging them to focus on concrete details
“Is There a Substitute for Direct Experience?
about the product. Hamilton found that engaging
Comparing Consumers’ Preferences after Direct and
in a preliminary exercise in which consumers
Indirect Product Experiences” is forthcoming from
focused on how they would accomplish a goal
the Journal of Consumer Research. For more
made consumer preferences formed by indirect
information about this research, please contact
experience indistinguishable from those formed by
rhamilto@rhsmith.umd.edu.
RESEARCH@SMITH
Information
security disclosures
after Sarbanes- Oxley
The Sarbanes-Oxley Act has caused an
increase in the voluntary disclosure of
firms’ information security activities.
T
he late 1990s saw a series of accounting scandals
to present empirical evidence that SOX is having an
that shook the corporate world, eventually landing a
impact on voluntary disclosure of information security
number of executives in prison and driving a major
activities, and indirect evidence that corporate
accounting firm out of business. The Sarbanes-Oxley
information security activities are receiving more
Act of 2002 (SOX) was passed in response, imposing
attention from corporate leadership after the
stricter controls and increased reporting responsibility
passage of SOX.
on firms. According to Smith School research, one
of the unintended side effects of the passage of SOX
The study compares frequency distributions of the
is the increasing voluntary disclosure of information
annual filings with the SEC for all firms from 2000
security measures taken by firms.
to 2004, consisting of 10-Ks for large firms, 10-KSBs
for small businesses and 20-Fs for foreign registrants,
Sections 302 and 404 of SOX require a publicly
which must also comply with SOX. The authors
traded company’s CEO and CFO to explicitly certify
examined more than 27,000 filings over this five-
that they accept responsibility for establishing and
year period. They detrended the data by taking first
maintaining adequate reporting and appropriate
differences. Gordon, Loeb, Lucyshyn, and Sohail
internal control systems within their firms. SOX gave
found that there was a more than 100 percent
the Securities and Exchange Commission (SEC) the
increase in the information security activities being
responsibility for setting the rules that firms must
reported after the passage of SOX.
follow in complying with the internal control report
under Section 404.
The rules provided by the SEC clearly indicate that
a firm’s internal control system must be capable
All this has indirectly led to an increase in the
of safeguarding the company’s assets, including
voluntary disclosure of information security activities,
information assets. While it does not specifically
according to a study conducted by Lawrence
require reporting of information security activities,
A. Gordon, Ernst & Young Alumni Professor of
it seems that most firms see this as implicit in
Managerial Accounting and Information Assurance,
SOX compliance.
Martin P. Loeb, professor of accounting and
information assurance and Deloitte & Touche Faculty
Why has there been such an increase in the
Fellow, William Lucyshyn, University of Maryland,
disclosure of information security activities if it is not
and Tashfeen Sohail, PhD ’06, Instituto de Empresa,
a requirement? Firms may be more aware of their
Madrid, Spain. The paper they co-authored is the first
information security activities, which would lead them
SEPTEMBER
SEPTEMBER 2007
2007 :: VOLUME
VOLUME 88 :: NUMBER
NUMBER 33
Research by
Larry Gordon and Martin Loeb
to pay more attention to those activities. Or it may be
While it does not specifically require reporting of
that SOX, which requires complex and sophisticated
information security activities, it seems that most
computer systems to manage the information
required for reporting, is causing firms to actually
firms see this as implicit in SOX compliance.
increase their information security activities. The
security, firms need to allocate a greater percentage
activities reported include security breaches as well
of their IT budgets to information security activities,”
as the steps firms are taking to secure their
says Gordon. “In general, firms are not increasing
information assets.
their spending on information security in a way that
is proportionate with the increasing importance of
“Firms may be reporting security breaches as a
information security.”
preemptive measure,” says Loeb. “Firms understand
that information about security breaches is going to
Gordon and Loeb also believe that for many firms
become public anyway; reporting both the problem
there is a measurable market value in this voluntary
and the steps they are taking to resolve it may be the
disclosure of information security activities—a topic
firm’s way of dealing with the negative impact of the
that is the subject of a future paper.
security breach.”
“The Impact of the Sarbanes-Oxley Act on the
The fact that a firm voluntarily discloses more
Corporate Disclosures of Information Security
information about its information security doesn’t
Activities” was published in the Journal of
mean that a firm has increased its level of security
Accounting and Public Policy. For more information,
activity. Gordon believes that increased disclosure is
contact lgordon@rhsmith.umd.edu or
a firm’s way of signaling the importance it attaches
mloeb@rhsmith.umd.edu.
to information security, but he warns that many
firms may not be investing sufficiently in this area.
“I think companies now recognize that security is a
critical issue. But given the importance of information
RESEARCH@SMITH
Exploring
e-Markets
at Smith
Remember what it was like to buy a plane ticket in
price and warehouse their goods and services,”
the old days? You told the travel agent where you
says Joseph Bailey, research associate professor and
were going, when you wanted to leave and when you
co-director of the center. Bailey, with co-director
wanted to come home, and the agent told you how
G. Anandalingam, Ralph J. Tyser Professor of
much your ticket would cost. Period. If you want to
Management Science and senior associate dean of the
purchase a plane ticket today, you are faced with a
Smith School, sets the research direction for CEME.
vast plethora of choices, and an equally vast plethora
of prices. Venture onto an airline’s Web site and you’ll
CEME is sponsored by and partners with such industry
find that their pricing page has a chart with multiple
leaders as IBM, AT&T, Verizon, IntelSat, and Dell,
pricing options. It is clear that the existence of the
among others. Sometimes the partnership involves
Internet has transformed airline pricing. But what are
financial support, such as the $2 million grant CEME
the implications of this transformation?
received from the National Science Foundation.
But CEME is just as interested in partnerships that
The Smith School’s Center for Electronic Markets and
yield data as in ones that yield funding—especially
Enterprises (CEME) focuses on just such questions as
if the data are particularly interesting, unusual or
these, exploring the impact of business problems that
hard-to-find. A recent project with Amazon uses
didn’t exist—weren’t even imagined—20 years ago.
data supplied by the Internet retailing giant to try
CEME studies electronic commerce and enterprises,
to determine the true extent of e-commerce activity
exploring the impact that information technology has
in the United States. Amazon is interested in the
on these markets and the way that markets interact
answer to this question because they would like to
with the Internet. CEME draws on the expertise
become a kind of electronic storefront for the very
of faculty from the Smith School and across the
smallest online retailers, who are often overlooked
University of Maryland to produce research that
by the Department of Commerce when it compiles
sheds light on current and potential uses of electronic
information on Internet retailing. CEME’s initial results
markets, and the unique problems and challenges
indicated that the amount of e-commerce in the U.S.
that they spawn.
may be underestimated by almost $20 billion
each year.
Dynamic pricing is one of those interesting new
problems. “Retailers are looking much more like
Smith faculty have unique expertise in analyzing large
financial markets, like someone taking advantage of
data sets, and a number of CEME research projects
arbitrage opportunities. If enough of these arbitrage
within the Smith School involve massive data analysis.
opportunities exist, it will change the way retailers
The study conducted by Wolfgang Jank and Galit
Shmueli in the area of online auctions is one such
project (see pages 5-6 for the article describing one
facet of this research). It uses data from a sniping
program as well as data culled from eBay.
SEPTEMBER 2007 : VOLUME 8 : NUMBER 3
Interdisciplinary research is another hallmark of
Bringing faculty members and industry executives
CEME. The University of Maryland’s economics
together does more than just publicize new findings.
department has faculty members conducting research
“A lot of the research we do is dependent on the
on auction design, the theory of markets, analytical
types of problems people bring to us,” says Bailey.
models of markets, and buyer-seller behavior. The
“That’s one of the reasons why we find a lot of value
computer science department, University of Maryland
in the CIO Forum and Netcentricity Conference. It
Institute for Advanced Computing (UMIACS) and
gives us the opportunity to meet new people with
the Institute for Systems Research have associated
new problems.”
faculty who study the technology of markets,
human-computer interfaces, optimal search
CEME shares research results with the academic
algorithms, and data mining.
and business communities through an annual
publication, CEME Reports, and a new quarterly
CEME disseminates its research results through
newsletter, which may be viewed online at
a variety of sources. The CIO Forum is an annual
www.rhsmith.umd.edu/ceme.
conference that allows researchers, teachers and
practitioners to exchange ideas in a dynamic
For more information about CEME, please contact
give-and-take series of presentations and panel
jbailey@rhsmith.umd.edu.
discussions. Participants come from high-tech
firms, financial services companies, consulting
companies, manufacturing, service industries,
non-profit organizations, and federal, state and
local government agencies. CEME also sponsors the
Smith School’s annual Netcentricity Conference,
which is structured much the same way but focuses
on the impact, implications and innovations of
digital networks.
RESEARCH@SMITH
Faculty Awards and Honors
New Faculty
In a study conducted for the INFORMS
The Smith School is pleased to
Galit Shmueli, associate professor of
Society for Marketing, an article by
welcome the following new faculty for
management science and statistics, is
Roland Rust, David Bruce Smith Chair in
the 2007-2008 academic year.
co-author of Data Mining for Business
Marketing, executive director of the Center
for Excellence in Service, and chair of the
Smith School’s marketing department,
published in the Journal of Marketing in
1995, was chosen as one of the 20 most
influential marketing articles of the past
25 years. The article is entitled “Return on
Quality: Making Service Quality Financially
Accountable,” with co-authors Anthony
Zahorik and Timothy Keiningham.
Debra Shapiro, Clarice Smith Professor
of Management and Organization, has
Intelligence: Concepts, Techniques, and
Accounting and
Information Assurance
Applications in Microsoft Office Excel
Shijun Cheng, associate professor, PhD
Peter C. Bruce.
University of Pittsburgh
Progyan Basu, Tyser Teaching Fellow,
PhD University of Nebraska
Colin Linsley, Tyser Teaching Fellow, PhD
University of Essex, Colchester, UK
Decision and Information
Technologies
two papers accepted in the Academy of
Mahesh Kumar, assistant professor, PhD
Management meeting’s 2007 Best
Massachusetts Institute of Technology
Paper Proceedings, one selected by
Xiaoqing Wang, assistant professor, PhD
the Organizational Behavior Division
University of Pittsburgh
and the other by the Conflict
Peter Weiss, PhD
Management Division.
George Washington University
Finance
Editorial Appointments
P.K. Kannan, Harvey Sanders Associate
Professor of Marketing, has been appointed
with XLMiner, with Nitin R. Patel and
The book’s content grew out of a
data mining course taught by Patel at
MIT’s Sloan School of Management
and subsequently refined while being
taught by Shmueli at the Smith School.
The book provides a theoretical and
practical understanding of the key
methods of classification, prediction and
data exploration that are at the heart
of data mining. It provides a business
decision-making context for these
methods, and uses real business cases
and data to illustrate their application and
interpretation. The presentation in the
book is structured so that the reader can
follow along and implement the algorithms
Mark Taranto, Tyser Teaching Fellow,
on his or her own with a very low
PhD University of California-Berkeley
learning hurdle.
Anna Obizhaeva, assistant professor,
PhD Massachusetts Institute of Technology
to the editorial board of Marketing Science.
Gilad Chen, associate professor of
New Book
Logistics, Business and
Public Policy
management and organization, has been
Featured Researchers
Joseph Bailey, research associate
professor and director of the Center
appointed to the editorial boards of
Cristian L. Dezso, assistant professor,
for Electronic Markets and Enterprises,
Personnel Psychology and Organizational
PhD New York University
received his PhD from the Massachusetts
Research Methods.
Yan Dong, assistant professor, PhD
Institute of Technology. His research
University of Maryland
and teaching interests span issues in
Gurdip S. Bakshi, Dean’s Professor
of Finance, and Steve Heston, associate
professor of finance, were appointed
to the editorial board of the Journal of
International Business Studies.
Zhi-Long Chen, associate professor
of management science, was appointed
associate editor of the Journal of Scheduling.
Marketing
Michael Trusov, assistant professor, PhD
University of California-Los Angeles
Yogesh Joshi, assistant professor, PhD
University of Pennsylvania
Management and
Organization
telecommunications, economics and
public policy with an emphasis on the
economics of the Internet, including
an identification of the existing public
policies, technologies, and market
opportunities that promote the benefits
of interoperability. Bailey is currently
studying issues related to the economics of
electronic commerce and how the Internet
changes competition and supply chain
Benjamin Hallen, assistant professor,
management.
PhD Stanford University
Paolo Prochno, Tyser Teaching Fellow,
Lawrence Gordon, Ernst & Young
MBA Vanderbilt University
Alumni Professor of Managerial Accounting
Michael Lawless, Tyser Teaching Fellow,
and Information Assurance and director
PhD University of California-Los Angeles
of the doctoral program, received his PhD
from Rensselaer Polytechnic Institute.
10
SEPTEMBER 2007 : VOLUME 8 : NUMBER 3
PhD Program
• Chih-Yang Tseng
(Accounting & Information Assurance)–
2006 Liam Glynn/Arizona State University
Center for Services Leadership Award.
The Smith School PhD program, which
National Taiwan University
was ranked #26 globally and #17 in the
• Li Zou (Logistics, Business &
At the May 10 Doctoral Program Awards
U.S. by the Financial Times in 2006, is
Public Policy)–Embry-Riddle
Banquet, the Smith School honored PhD
producing scholars who go on to teach
Aeronautical University
students for exceptional achievements.
• Frank T. Paine Award for Academic
at top-ranked institutions around the
world. Over the past five years, roughly
The research of Smith’s PhD students and
Achievement: Corey Angst, Tuck Siong
99 percent of Smith’s PhD students have
their faculty collaborators has also received
Chung, Sharon Hill
been successfully placed directly after they
significant recognition, publishing in top
graduate—about 80 percent as tenure
journals. Recent publications include:
track assistant professors at an accredited
• Communications of the ACM
university, and the rest as researchers in
• Journal of Consumer Research
either private or government organizations.
• Journal of Transport Economics
Recent placements include:
• Corey Angst (Decision & Information
Technologies)–Notre Dame
• Animesh (Decision & Information
Technologies)–McGill University
• Ashwin Aravindakshan (Marketing)–
University of California at Davis
• Adriana Rossiter Hofer (Logistics, Business
& Public Policy)–University of Arkansas
and Policy
• Journal of the Transportation
Research Forum
• Shweta Oza (Marketing)–
University of Miami
• Michael Pfarrer (Management &
Organization)–University of Denver
Student: Animesh, Christian Hofer,
Steven Johnson, Shweta Oza
• Abraham Golub Memorial Dissertation
Proposal Prize: Si Chen
• Marvin A. Jolson Outstanding Marketing
Student: Tuck Siong Chung
• Gerald and Deana Stempler Competition
• Management Science
for Research Related for Family
• Marketing Science
Owned/Controlled Businesses:
• MIS Quarterly
Vandana Ramachandran
• Networks
• Quantitative Marketing and Economics
For more information about the
• Statistical Science
Smith School’s PhD program, visit
www.rhsmith.umd.edu/doctoral. For a
• Christian Hofer (Logistics, Business &
Public Policy)–University of Arkansas
• Allan N. Nash Outstanding Doctoral
Smith doctoral students were honored
broader view of Smith’s current research,
in a number of ways this year. Christian
including award-winning papers by
Hofer received the Transportation Research
Smith’s PhD students, visit
Forum’s Best Graduate Student Paper
www.rhsmith.umd.edu/research.
Award in 2006. Carol Miu received the
His work focuses on such issues as
application areas like electronic markets,
Martin Loeb, professor of accounting
performance measures, economic aspects
online auctions and marketing, and
and information assurance, Deloitte &
of information security, cost management
methodological areas like stochastic
Touche LLP Faculty Fellow and chair of
systems, the interface between managerial
optimization and simulation, spatial and
the accounting and information assurance
accounting and information technology,
temporal data analysis, and functional
department, received his PhD from
and capital investments. He is widely
data analysis.
Northwestern University. His research deals
published and serves as editor-in-chief of
with economic aspects of information
the Journal of Accounting and Public Policy
David Kirsch, associate professor of
security and the interface between
and on the editorial boards of several
management and entrepreneurship,
managerial accounting and information
other journals.
received his PhD from Stanford University.
technology. In addition to being a
His primary research interests are industry
professor at the Smith School, he holds an
Rebecca Hamilton, associate professor
emergence, technological choice,
affiliate professorship in the University of
of marketing, received her PhD from the
technological failure, and the role of
Maryland Institute for Advanced Computer
Massachusetts Institute of Technology.
entrepreneurship in the emergence of
Studies (UMIACS).
Her research focuses on aspects of group
new industries. Kirsch is also interested
decision making, such as the strategies
in methodological problems associated
Galit Shmueli, associate professor
people use to influence others’ choices and
with historical scholarship in the digital
of management science and statistics,
the mental models people use to identify
age. With the support of grants from the
received her PhD from Technion - Israel
whether the process used to make a choice
Alfred P. Sloan Foundation and the Library
Institute of Technology. Her research
was fair or unfair.
of Congress, he is currently building a
focuses on developing and using statistical
digital archive of the dot-com era that will
and probabilistic methods in marketing,
Wolfgang Jank, associate professor
preserve at-risk, born-digital content about
quality control, and bio-surveillance.
of management science and statistics,
business and culture during the late 1990s.
She collaborates with researchers from
received his PhD from the University of
Selected materials are available to the
computer science, marketing, and industry.
Florida. His research interests include
public at www.dotcomarchive.org.
RESEARCH@SMITH
11
Faculty Research Profile:
David Kirsch
Entrepreneurial entry in an emerging
Kirsch’s research interests span both
industry is like exploring uncharted
the unique qualities that accompany
territory. Understanding what
the emergence of the Internet and
happened in the emerging Internet
the general lessons for entrepreneurs
industry has also been something of a
that can be gleaned from this unique
mystery—a mystery being unraveled
period in history.
with patience and meticulous care by
David Kirsch, associate professor of
In a study on dot-com entry, Kirsch
management and entrepreneurship.
found that despite significant losses
suffered by investors, nearly 50
Kirsch has been winnowing the
percent of 1990s dot-com startups
facts out of vast fields of anecdotal
survived at least five years. That
evidence, perception and conjecture
success rate was better than or on
for the past 10 years. Kirsch, with
par with other emerging industries,
collaborator and frequent co-author
contradicting the traditional view that
Other studies step back from
Brent Goldfarb, assistant professor
the majority of Internet companies
examining the dot-com era to take
of management and organization,
landed belly up. The research also
a general look at some of the issues
became interested in the rise of
showed that the “Get Big Fast”
surrounding entrepreneurship. In one
the Internet, the technological
strategy which so many new ventures
recent study, Kirsch and his co-authors
transformation that followed and the
pursued was ultimately unsuccessful,
look at the relationship between a
successes and failures of new ventures
and may have actually played a role in
new venture’s organizational structure
during this time period.
some companies’ failures.
and its growth by examining a panel
of early Internet service providers.
“Someone once said of the dot-com
Access to business plans, marketing
“You always think that the whole
era that in a hurricane, even turkeys
plans, technical plans, venture
point of new ventures is that they
can fly,” says Kirsch. “It’s more
presentations, and other business
are responsive and fluid. Most
accurate to say that in a hurricane,
documents is key to helping business
entrepreneurs spend very little time
nothing can fly—everything just gets
historians and organizational
organizing internally. But it turns out
hurled around. As a business historian
researchers make sense of issues like
that having more structure, more
it is interesting to study the hurricane,
venture success and failure in the
defined roles and specialization, more
to understand where the hurricane
dot-com era. Kirsch is concerned
early internal investment, is correlated
came from and why it acted the
about the issue of digital preservation
with better performance over time,”
way it did. But it is also interesting
of these records and since 2002 has
says Kirsch.
to look at what we can learn about
been collecting business plans and
entrepreneurial entry and the
documents from the early history of
For more information about
success of entrepreneurial ventures.
the dot-com era and compiling them
Kirsch’s research, contact
What does the big storm lay bare
in a digital database. An upcoming
dkirsch@rhsmith.umd.edu.
that is hard to observe in ordinary
paper serves as an intellectual
circumstances?”
justification of this archival work,
considering how the ephemerality
of digital records and data scarcity
will become the challenge for future
organizational theorists.
12
SEPTEMBER 2007 : VOLUME 8 : NUMBER 3
University of Maryland
The University of Maryland, College Park, is one of the nations’s top 20 public research universities. In 2007,
the University of Maryland received approximately $407 million in sponsored research and outreach activities.
The university is located on a 1,250-acre suburban campus, eight miles outside Washington, D.C., and 35 miles
from Baltimore.
Robert H. Smith School of Business
The Robert H. Smith School of Business is an internationally recognized leader in management education and
research. One of 13 colleges and schools at the University of Maryland, College Park, the Smith School offers
undergraduate, full-time and part-time MBA, executive MBA, executive MS, PhD, and executive education
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certification programs in learning locations on four continents—North America, Europe, Africa and Asia. More
information about the Robert H. Smith School of Business can be found at www.rhsmith.umd.edu.
In this issue
• Helping consumers understand your product
• Forecasting online auction prices
• Sarbanes-Oxley and information security
• Research from Smith’s Center for
Electronic Markets and Enterprises (CEME)
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www.rhsmith.umd.edu/podcast.
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Research@Smith are available in Mandarin Chinese
in both print and audio. Go to:
www.rhsmith-umd.cn/bi to learn more.
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