Many people have seen my emails with Ran Duan of Sichuan Garden restaurant in Brookline.
Having reflected on my interaction with Ran, including what I said and how I said it, it’s clear that I was very much out of line. I aspire to act with great respect and humility in dealing with others, no matter what the situation. Clearly I failed to do so. I am sorry, and I intend to do better in the future.
I have reached out to Ran and will apologize to him personally as well.
Edelman, Benjamin. “Accountable? The Problems and Solutions of Online Ad Optimization.” IEEE Security & Privacy 12, no. 6 (November-December 2014): 102-107.
Online advertising might seem to be the most measurable form of marketing ever invented. Comprehensive records can track who clicked what ad–and often who saw what ad–to compare those clicks with users’ subsequent purchases. Ever-cheaper IT makes this tracking cost-effective and routine. In addition, a web of interlocking ad networks trades inventory and offers to show the right ad to the right person at the right time. It could be a marketer’s dream. However, these benefits are at most partially realized. The same institutions and practices that facilitate efficient ad placement can also facilitate fraud. The networks that should be serving advertisers have decidedly mixed incentives, such as cost savings from cutting corners, constrained in part by long-run reputation concerns, but only if advertisers ultimately figure out when they’re getting a bad deal. Legal, administrative, and logistical factors make it difficult to sue even the worst offenders. And sometimes an advertiser’s own staff members prefer to look the other way. The result is an advertising system in which a certain amount of waste and fraud has become the norm, despite the system’s fundamental capability to offer unprecedented accountability.
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’s Advertising Labels in 2014
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.
Google Inc. in 2014 (Abridged) – Case (HBP 915005)
Google Inc. in 2014 Role Supplement – Supplement (HBP 915017)
Google Inc. in 2014 and Google Inc. in 2014 (Abridged) – Teaching Note (HBP 915011)
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.
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.
Pivots and Incentives at LevelUp – Teaching Note (HBP 915015)
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.
Optimization and Expansion at OpenTable – PowerPoint Supplement (HBP 910010)
Optimization and Expansion at OpenTable – Teaching Note (HBP 915013)
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.
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.
Distribution at American Airlines (B) – Supplement (HBP 909036)
Distribution at American Airlines (C) – Supplement (HBP 913034)
Distribution at American Airlines (D) – Supplement (HBP 913035)
Distribution at American Airlines (A-D) – Teaching Note (HBP 909059)
Distribution at American Airlines – Slide Supplement (HBP 914039)
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.