What’s the value of a bit? It seems that going after folks who have traded songs or movies online is a huge expenditure of effort and money. Is DRM-protected content the way to go? If you don’t agree, propose another method for the distribution of digital multimedia so that content creators can still be compensated.
It is interesting how much value is placed on a bit. According to Abelson article one illegally downloaded song could cost anywhere from $200 to $150,000. This should be a deterrence for anyone to download illegally when songs cost at maximum $1.29 on iTunes. Either people do not know or do not understand the enormous consequence of their actions because illegal downloading of music and other media files is prevalent.
The RIAA has been working to stop these illegal transactions of media. They use software to find and contact those people who have some amount of suspicious files. They put forth a large amount of effort in order to catch what they consider to be "cyber criminals." There are laws and it is illegal to download copyrighted material. This organization is simply enforcing laws that are easily and often broken. These laws are like speed limits. Many people go over the speed limit but the major violators are the ones that pay the most. It is not possible to catch all the speedsters or illegal downloaders but everyday another person is caught.
I do not agree with all aspects of DRM protected content. There are several setbacks and restrictions that make this media control technique less than optimal. The restriction that this type of media puts on organizations, such as iTunes and musicload, is a tight spot for their respective customers. The DRM software would not allow certain music files to be played. This problem invites people to find ways to bend and get around the rules put in place, just as people circumvent the system of buying music.
I feel that with any system people will learn to navigate around and squeeze through loopholes. People will do a lot to avoid paying for music when they believe that the record companies already make more than enough money. This brings us back the previously discussed idea of the hot button word "free."
I think that DRM is the current solution to the problem. It is not however the final solution to the problem. The nature of illegally downloading and sharing music and movies will continuously change with the type of protection against it. The only way to fully avoid the illegal distribution of digital media is to get rid of it. This is not beneficial to anyone. Organizations are trying to enforce the laws more effectively and will the introduction of new protections things will change until another loophole is discovered.
With the discovery and additions of new technology security of these new features is put to the test. A foolproof system does not exist yet. I believe that one day it will. Abelson suggests a few possibilities, however none are perfect. There could be a paid subscription that allows people to download what they want while paying an overarching theme. There could be specific networks and if you pay for the network you could have access to the media within. The main point is to stop illegal downloads and still allow the legal distribution of digital media. Someday a solution will be found but I believe that untill that day the current system is the best it can be.
Tuesday, November 30, 2010
Tuesday, November 16, 2010
EBAY WORKS
Considering the Prisoner’s Dilemma in this chapter, provide your own insight on how sites such as eBay “work” for most participants of this popular online auction site. Do they really work? Or is there too much risk?
Most people selling on eBay are people who are trying to get rid of old junk and just make a dollar. Those people buying on eBay are generally trying to get something cheap. This creates two goals. Selling something cheap does not make as much money and making more money requires that people pay a higher price. Here is a clear dilemma. In order for auction sites to work both parties must find an equal value for which they are willing to buy and sell their product for.
Each party must also trust the other. As in the prisoner's dilemma, one must trust the other to get the best outcome for each. However the buyer could decide that the minimum bid is too high, the seller gets nothing and must hold onto the item and the buyer looses nothing or the seller drops the price and makes less money and the buyer get exactly what they wanted. On the other hand the buyer could be tricked into spending more for a product. The seller could have multiple screen names and up-bid their own product. They seller could also sell something that is less quality than what they may lead to believe.
Both of the previous situations can be avoided with trust. If there is a way to ensure trust the idea of eBay could be foolproof, as would the idea of stealing and crashing a car like in Shirky's chapter. Trust is a major part of buying and selling online. The site eBay attempts to improve trust between patrons of the site by providing areas that users can leave feedback for each other. EBay then compiles the feedback for other users to see. This allows buyers to rate the trustworthiness of a seller. This is enough for most users. They will select a seller with a higher satisfaction rating than one with a low rating.
Other users do not even look at this feedback and trust in the goodness of people or simply trust in the reputation of the site. If a large percent of customers lied cheated and stole to make more money less and less people would use the site to make purchases, but the site survives. The fact that eBay and other auction and bidding sites exists and continue to make money show that even with the framework of a prisoner's dilemma in place the sites still work. People are obviously still interested in using the tools provided and trust the other users as they hope they are trusted.
There are obvious risks involved with making purchases on eBay. There may even be too mush risk for those skeptical people. But over all the use of the auction site is too high for someone to believe that there is too much risk. EBay has built up a solid reputation and seems to have helped people stay within the boundaries of the win-win (or rather less loss-less loss) choice in the prisoners dilemma.
Most people selling on eBay are people who are trying to get rid of old junk and just make a dollar. Those people buying on eBay are generally trying to get something cheap. This creates two goals. Selling something cheap does not make as much money and making more money requires that people pay a higher price. Here is a clear dilemma. In order for auction sites to work both parties must find an equal value for which they are willing to buy and sell their product for.
Each party must also trust the other. As in the prisoner's dilemma, one must trust the other to get the best outcome for each. However the buyer could decide that the minimum bid is too high, the seller gets nothing and must hold onto the item and the buyer looses nothing or the seller drops the price and makes less money and the buyer get exactly what they wanted. On the other hand the buyer could be tricked into spending more for a product. The seller could have multiple screen names and up-bid their own product. They seller could also sell something that is less quality than what they may lead to believe.
Both of the previous situations can be avoided with trust. If there is a way to ensure trust the idea of eBay could be foolproof, as would the idea of stealing and crashing a car like in Shirky's chapter. Trust is a major part of buying and selling online. The site eBay attempts to improve trust between patrons of the site by providing areas that users can leave feedback for each other. EBay then compiles the feedback for other users to see. This allows buyers to rate the trustworthiness of a seller. This is enough for most users. They will select a seller with a higher satisfaction rating than one with a low rating.
Other users do not even look at this feedback and trust in the goodness of people or simply trust in the reputation of the site. If a large percent of customers lied cheated and stole to make more money less and less people would use the site to make purchases, but the site survives. The fact that eBay and other auction and bidding sites exists and continue to make money show that even with the framework of a prisoner's dilemma in place the sites still work. People are obviously still interested in using the tools provided and trust the other users as they hope they are trusted.
There are obvious risks involved with making purchases on eBay. There may even be too mush risk for those skeptical people. But over all the use of the auction site is too high for someone to believe that there is too much risk. EBay has built up a solid reputation and seems to have helped people stay within the boundaries of the win-win (or rather less loss-less loss) choice in the prisoners dilemma.
FOAF
What professional benefits do you see by investing some time in a FOAF-style network?
Many time professional services and businesses rely on connections, especailly small business. Freind of a Friend or FOAF style networking is all about connections. If someone is a friend of mine and they then meet a different friend of mine there is now a connection between them, me. This is what happens with a friend of a fiend network only I do not need to be involved any sort of way. The network makes all the connections for us. In Clay Shirky's book, he speaks about a social network tool called dodgeball. This tool not only allows you to find connections online but it allows people to physically find someone who is also updating their location. It uses the connection between friends and the information they upload to various social network sites to connect people with each other.
A basic example is the friend wheel on facebook. Here is my friend wheel, it shows how each of my firends connects to other friends that are also on facebook. This is not as complicated as the dodgeball scenario but still shows how many connections can be made throough just one small group of friends.
For a professional organization these connections are important. Any company that I am a part of, now has acess to all of my firneds. From my friends they can get to each of their friend wheels and this can obviously be a huge increase in customers. The expansion is also kept from being random. There is a certain order in which companies can recognize possible customers.
Using FOAF the companies can see the interests of thie current employees and customers and then look and find friends of those people with similar interests. FOAF is a tool that can is complex enough to be benificial to businesses. It is important to keep in mind however that it is just a tool. These networks only go part way. The company would have to put in work to connect the dots and work to gain the customers. It connects people through aspects about their lives but does not physically bring people together.
Small business are always in need of a larger customer base. They could use FOAF to expand. Instead of simply casting a broad net hoping to pull in at least a few customers they can target certian types of people throught this type of network. As small networks are connected through FOAF a larger network is formed. As the network grows so does the businees and so does their business's connections. With the addition of every new customer a new network can be reached. These networks will intermingle and the users of the companies service or product will become a network of their own.
Many time professional services and businesses rely on connections, especailly small business. Freind of a Friend or FOAF style networking is all about connections. If someone is a friend of mine and they then meet a different friend of mine there is now a connection between them, me. This is what happens with a friend of a fiend network only I do not need to be involved any sort of way. The network makes all the connections for us. In Clay Shirky's book, he speaks about a social network tool called dodgeball. This tool not only allows you to find connections online but it allows people to physically find someone who is also updating their location. It uses the connection between friends and the information they upload to various social network sites to connect people with each other.
A basic example is the friend wheel on facebook. Here is my friend wheel, it shows how each of my firends connects to other friends that are also on facebook. This is not as complicated as the dodgeball scenario but still shows how many connections can be made throough just one small group of friends.
Using FOAF the companies can see the interests of thie current employees and customers and then look and find friends of those people with similar interests. FOAF is a tool that can is complex enough to be benificial to businesses. It is important to keep in mind however that it is just a tool. These networks only go part way. The company would have to put in work to connect the dots and work to gain the customers. It connects people through aspects about their lives but does not physically bring people together.
Small business are always in need of a larger customer base. They could use FOAF to expand. Instead of simply casting a broad net hoping to pull in at least a few customers they can target certian types of people throught this type of network. As small networks are connected through FOAF a larger network is formed. As the network grows so does the businees and so does their business's connections. With the addition of every new customer a new network can be reached. These networks will intermingle and the users of the companies service or product will become a network of their own.
Thursday, November 11, 2010
Relay for Life and Strike
Look deeper into the concept of a “information cascade.” Can you cite an example of where following the actions of others was a sound idea? Where doing so ended up being a poor choice?
The basic idea of "information cascade" is that someone notices something that another person or group is doing. After seeing those actions they then make the same choice, or take the same action as the other person or group. The idea of protesting the East German government after World War II is an example of this information cascade. A small group started a small protest every Monday. Overtime more people noticed these gathering and decided to join after seeing no response from the government, because of the groups overall lack of numbers. Each week the number grew. Once the government realized they needed to make a change and stop the group, it was much too large. The protests were then a success and the East German Government resigned.
Many times joining a group like this is a successful venture. When there is little chance of failure or receiving punishment more people are willing to join. People like to be comfortable in what they do, especially low risk high reward situations, like in East Germany. Another more positive example is the idea of Relay for Life in the fight against cancer. Relay for Life began when one man decided to run for 24 hours straight to raise money for his local cancer society office, he raised $27,000. People saw what he had done and liked it so they then began running with him in teams to raise money. Eventually the word spread and now we have relay for life events once a year in thousands of locations around the country. I attend the local relay for life in my city and as a event we raise over 1 million dollars every year. Millions of people followed the lead of one man the create an event to raise millions of dollars to fight cancer! This is a great positive outlook on an information cascade.
Another example of an information cascade could be a strike. Union workers start talking amongst themselves about higher pay and working less hours. Then a small group decides to try and force the subject with the company by not working. Other people may see the cause, realize they want the same thing and follow suit. This idea could spread through the company and maybe achieve their goals, but many times not. Companies can crush strikes by acting when they are still small. Threatening to fire those workers who strike and simply continuing work without them could cause the strike to fail. My dad works for the Newport News Shipyard and was hired when workers went on strike in the mid 1980's. The shipyard simply continued as a company allowing those who went on strike to not get paid and eventually loose their jobs because of the strike. This is an example of where following the ideas of a small group may not pay off.
Information cascade is a phenomenon that can produce both positive and negative effects depending on the topic spreading. Just like good and bad news a groups can spread ideas rapidly. Whether good or bad it is not to hard to find members to join your cause, even if they regret it in the end.
http://www.relayforlife.org/relay/about
The basic idea of "information cascade" is that someone notices something that another person or group is doing. After seeing those actions they then make the same choice, or take the same action as the other person or group. The idea of protesting the East German government after World War II is an example of this information cascade. A small group started a small protest every Monday. Overtime more people noticed these gathering and decided to join after seeing no response from the government, because of the groups overall lack of numbers. Each week the number grew. Once the government realized they needed to make a change and stop the group, it was much too large. The protests were then a success and the East German Government resigned.
Many times joining a group like this is a successful venture. When there is little chance of failure or receiving punishment more people are willing to join. People like to be comfortable in what they do, especially low risk high reward situations, like in East Germany. Another more positive example is the idea of Relay for Life in the fight against cancer. Relay for Life began when one man decided to run for 24 hours straight to raise money for his local cancer society office, he raised $27,000. People saw what he had done and liked it so they then began running with him in teams to raise money. Eventually the word spread and now we have relay for life events once a year in thousands of locations around the country. I attend the local relay for life in my city and as a event we raise over 1 million dollars every year. Millions of people followed the lead of one man the create an event to raise millions of dollars to fight cancer! This is a great positive outlook on an information cascade.
Another example of an information cascade could be a strike. Union workers start talking amongst themselves about higher pay and working less hours. Then a small group decides to try and force the subject with the company by not working. Other people may see the cause, realize they want the same thing and follow suit. This idea could spread through the company and maybe achieve their goals, but many times not. Companies can crush strikes by acting when they are still small. Threatening to fire those workers who strike and simply continuing work without them could cause the strike to fail. My dad works for the Newport News Shipyard and was hired when workers went on strike in the mid 1980's. The shipyard simply continued as a company allowing those who went on strike to not get paid and eventually loose their jobs because of the strike. This is an example of where following the ideas of a small group may not pay off.
Information cascade is a phenomenon that can produce both positive and negative effects depending on the topic spreading. Just like good and bad news a groups can spread ideas rapidly. Whether good or bad it is not to hard to find members to join your cause, even if they regret it in the end.
http://www.relayforlife.org/relay/about
Revolutionary E-mail?
Based on the quote from this chapter, “revolution doesn’t happen when society adopts new technologies--it happens when society adopts new behaviors,” do you agree or disagree? Cite examples to support your position.
Just as we have talked about before things become invisible over time. When something becomes invisible it no longer stands out and is integrated into many aspects of everyone's daily life, much like the Internet is today, or telephone. We may not remember a time, but at one point both of these ideas were revolutionary. They became truly revolutionary when people began to have other aspects of life revolve around the new technologies, not just when they started being used. I believe Clay Shirky is correct. Society truly becomes revolutionized when people's behavior is changed to fit a new technology.
Using the Internet to send e-mail, in chapter six of Shirky’s book shows a change in Societies behavior, not just an adoption of a new technology. Many to many communication is vital in today's society. E-mail is one tool that makes this possible. When society began adopting this new idea and using the Internet's capabilities to interact e-mail was not yet revolutionary. The revolution happened once there was no other logical way to send a mass letter. Revolution happens when a person's first thought, their behavior, immediately points them to the new technology. This shows a change in society’s behavior.
When society adopts the technology of e-mail it becomes one option for sending out a mass message, there were other forms of group communication. These other forms did not have the benefits that e-mail had, like quickness of delivery, inexpensive cost, and lack of need for synchronization. Once society realized the e-mail was the only reasonable way to send a mass message, it became second nature to gravitate to e-mail over any other type of communication.
E-mail in a way has become invisible in society. Once this shift to e-mail from other forms of communication happened it became revolutionary. It changed the way people thought about communication. It opened many doors of opportunity for communication. Adoption of a technology is quick, making that technology revolutionary takes more time.
Just as we have talked about before things become invisible over time. When something becomes invisible it no longer stands out and is integrated into many aspects of everyone's daily life, much like the Internet is today, or telephone. We may not remember a time, but at one point both of these ideas were revolutionary. They became truly revolutionary when people began to have other aspects of life revolve around the new technologies, not just when they started being used. I believe Clay Shirky is correct. Society truly becomes revolutionized when people's behavior is changed to fit a new technology.
Using the Internet to send e-mail, in chapter six of Shirky’s book shows a change in Societies behavior, not just an adoption of a new technology. Many to many communication is vital in today's society. E-mail is one tool that makes this possible. When society began adopting this new idea and using the Internet's capabilities to interact e-mail was not yet revolutionary. The revolution happened once there was no other logical way to send a mass letter. Revolution happens when a person's first thought, their behavior, immediately points them to the new technology. This shows a change in society’s behavior.
When society adopts the technology of e-mail it becomes one option for sending out a mass message, there were other forms of group communication. These other forms did not have the benefits that e-mail had, like quickness of delivery, inexpensive cost, and lack of need for synchronization. Once society realized the e-mail was the only reasonable way to send a mass message, it became second nature to gravitate to e-mail over any other type of communication.
E-mail in a way has become invisible in society. Once this shift to e-mail from other forms of communication happened it became revolutionary. It changed the way people thought about communication. It opened many doors of opportunity for communication. Adoption of a technology is quick, making that technology revolutionary takes more time.
Wednesday, November 3, 2010
To buy, or not to buy...
Explain and give an example of a mental transaction cost.
A mental transaction cost can be defined by a decision that must be made by a consumer when making a purchase. Is that purchase necessary? Is the cost worth what is being received in return? These are the questioned involved with the decision to make a purchase. People would rather not think and make decisions which means people would prefer to have little or no transaction cost. That is one reason people like free things. If there is no cost to the product then the decision is made infinitely easier by the fact that the mental transaction cost is basically eliminated.
According to Chris Anderson, in his chapter on "free," Selling something even as cheap as a penny can deter people from making a purchase. That simple one cent cost forces a decision and a higher mental transaction cost. Obviously that transaction cost would be lower than the purchase of a new car. That mental transaction cost requires a much higher level of thought.
One example of a mental transaction cost takes place when a consumer is shopping for a new shirt. The consumer must decide it the cost is worth what is being gained, the new shirt. If the shirt is a name brand the monetary cost is higher but the benefit may be higher as well. The shirt may be "cool" or look really good on the purchaser, these are things that could go through the head of the person making the purchase. The mental transaction cost is like what is being given up if the purchase is made. The consumer would obviously lose some amount of money and possibly popularity but would gain a shirt and possible popularity. In this case the consumer must determine if the pros out weigh the cons.
This example shows the mental transaction cost of purchasing a shirt. There are these costs when making any purchase. It is important to keep these points in mind when making a purchase. Most people make these choices in their head without even realizing, but they are still present.
A mental transaction cost can be defined by a decision that must be made by a consumer when making a purchase. Is that purchase necessary? Is the cost worth what is being received in return? These are the questioned involved with the decision to make a purchase. People would rather not think and make decisions which means people would prefer to have little or no transaction cost. That is one reason people like free things. If there is no cost to the product then the decision is made infinitely easier by the fact that the mental transaction cost is basically eliminated.
According to Chris Anderson, in his chapter on "free," Selling something even as cheap as a penny can deter people from making a purchase. That simple one cent cost forces a decision and a higher mental transaction cost. Obviously that transaction cost would be lower than the purchase of a new car. That mental transaction cost requires a much higher level of thought.
One example of a mental transaction cost takes place when a consumer is shopping for a new shirt. The consumer must decide it the cost is worth what is being gained, the new shirt. If the shirt is a name brand the monetary cost is higher but the benefit may be higher as well. The shirt may be "cool" or look really good on the purchaser, these are things that could go through the head of the person making the purchase. The mental transaction cost is like what is being given up if the purchase is made. The consumer would obviously lose some amount of money and possibly popularity but would gain a shirt and possible popularity. In this case the consumer must determine if the pros out weigh the cons.
This example shows the mental transaction cost of purchasing a shirt. There are these costs when making any purchase. It is important to keep these points in mind when making a purchase. Most people make these choices in their head without even realizing, but they are still present.
ZERO?!
Why is “zero” such a hot-button word?
The word "zero" changes things. There is a psychological trigger associated with the word. In the Chris Anderson chapter on free, an experiment was conducted with selling chocolate. When first selling chocolate the higher quality Swiss chocolate sold at fifteen cents and the Hershey's kiss at only one cent. The Swiss chocolate sold better, because of the better quality of candy. When each price was reduced by one cent, making the Hershey's kiss free, it was taken at a higher rate.
Zero is less of a quantitative value and more of a psychological effect that must be taken in context. Does the fact that something is free effect the quality of the item? Does the fact that something is free now but it used cost money matter? What real difference is there between a free bagel and free ketchup? Do people value items that were free the same as items they pay for? All of these questions are related to the actual cost of an item but are more related to the psychology of the decisions that we make as customers.
As Chris Anderson spoke in the beginning of the chapter, things that used to be sold but are then given away at zero cost tend to fail, but things that have never cost money tend to be extremely successful, as seen with the Village Voice and The Onion. The quality of the Village Voice, seemed to diminish because the price diminished. The Onion which has always been free, and makes its money from advertisements, is an extremely successful satirical news source. People's perception of free affects their decisions when it comes down to the idea of zero.
Zero means that there is no real decision to be made. Regardless of whether the item that is free is needed it can be obtained at no toll. If the item goes unused, so be it. The consumer also loses the right to complain if the item is not exactly what they wanted. This is where the expression, "you get what you pay for," comes into play. If an item costs money the consumer clearly wants to own the product and will purchase the exact item that they desire. If the item is free the consumer may or may not want or need the product, or it may not fulfill the exact need of the consumer.
Zero is a hot-button word and it changes consumers' perceptions about products. The word zero can create success or failure for a product. It allows people to make decisions more easily and can cause people to get something they do not need or is not what they really wanted.
The word "zero" changes things. There is a psychological trigger associated with the word. In the Chris Anderson chapter on free, an experiment was conducted with selling chocolate. When first selling chocolate the higher quality Swiss chocolate sold at fifteen cents and the Hershey's kiss at only one cent. The Swiss chocolate sold better, because of the better quality of candy. When each price was reduced by one cent, making the Hershey's kiss free, it was taken at a higher rate.
Zero is less of a quantitative value and more of a psychological effect that must be taken in context. Does the fact that something is free effect the quality of the item? Does the fact that something is free now but it used cost money matter? What real difference is there between a free bagel and free ketchup? Do people value items that were free the same as items they pay for? All of these questions are related to the actual cost of an item but are more related to the psychology of the decisions that we make as customers.
As Chris Anderson spoke in the beginning of the chapter, things that used to be sold but are then given away at zero cost tend to fail, but things that have never cost money tend to be extremely successful, as seen with the Village Voice and The Onion. The quality of the Village Voice, seemed to diminish because the price diminished. The Onion which has always been free, and makes its money from advertisements, is an extremely successful satirical news source. People's perception of free affects their decisions when it comes down to the idea of zero.
Zero means that there is no real decision to be made. Regardless of whether the item that is free is needed it can be obtained at no toll. If the item goes unused, so be it. The consumer also loses the right to complain if the item is not exactly what they wanted. This is where the expression, "you get what you pay for," comes into play. If an item costs money the consumer clearly wants to own the product and will purchase the exact item that they desire. If the item is free the consumer may or may not want or need the product, or it may not fulfill the exact need of the consumer.
Zero is a hot-button word and it changes consumers' perceptions about products. The word zero can create success or failure for a product. It allows people to make decisions more easily and can cause people to get something they do not need or is not what they really wanted.
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