Essays on the management of information and technology

This dissertation consists of three independent chapters. The first chapter studies the strategy of a proprietary, profit-maximizing firm that competes with a freely available open source application. The technologies are characterized by network effects and compete in a segmented market. When the proprietary firm competes head-to-head with Open Source Software, it is profit maximizing for the firm to choose an architecture that is compatible with the open source product. However, if the proprietary firm can enter the market first, it can increase profits and gain market share by designing for incompatibility, even if customers can later switch to open source at zero cost. To capitalize on its first-mover advantage, the proprietary firm must increase its development investment to improve its product features.; The second chapter studies the adoption dynamics and pricing strategies of two profit-maximizing firms selling to a multi-segment market and offering incompatible technologies that are characterized by network effects. When firms enter the market simultaneously, there is less compatibility compared to the social optimum. If one firm enters the market first, it can use a "divide and conquer" strategy to increase its profit compared to the simultaneous entry scenario, even when there are no switching costs. If there are non-negative switching costs, the first mover can increase its profit or market share, resulting in more compatibility than the social optimum. We study how the threshold switching cost and optimal adoption sequence depend on consumer preferences, market segment sizes, and network effects.; The third chapter studies the design of information systems. How much and what type of know-how information should an organization collect and remember? We find that information about successes is more useful than information about failures, explaining companies' penchant for "best practice". Furthermore, the optimal amount of information is maximal for large organizations faced with medium levels of environmental stability and high variance of potential payoffs. We also consider the trade-off between exploration and exploitation when firms design an information system and find that recording information about mediocre practices may inhibit fruitful exploration.