If we build it, they will come:

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If we build it, they will come Teaching
ecommerce in a virtual economy
Howard Rosenbaum Indiana University
hrosenba_at_indiana.edu Margaret Lennox University
of Greenwich M.E.Lennox_at_greenwich.ac.uk Jannette
Moody The Citadel Janette.Moody_at_Citadel.edu Cath
erine Ridings Lehigh University
ridings_at_lehigh.edu William Spangler Duquesne
University spangler_at_duq.edu
August 5, 2001
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I. Introduction The virtual economy and
ecommerce II. Pedagogical strategy
What is problem based learning?
Structure of the course III. The student
experience in the VE Store
owners Shoppers
IV. How the VE works
Results and next steps
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I. Introduction The virtual economy and
ecommerce Challenge to design and develop an
inquiry-based learning environment for teaching
ecommerce Objective provide students with a
challenging, novel, technology-focused, and
learner-centered educational experience They
learn by doing ecommerce instead of
listening to someone talk about how to do
ecommerce Technology a working, robust, and
web-based virtual economy (VE Web, Cold Fusion,
and Oracle) Syllabus http//www.slis.indiana.edu
/hrosenba/www/L561/syll/syll6.html
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I. Introduction The virtual economy and
ecommerce II. Pedagogical strategy
What is problem based learning?
Structure of the course III. The student
experience in the VE Store
owners Shoppers
IV. How the VE works
Results and next steps
5
II. Pedagogy What is problem based learning
(PBL)? Learning confronting and resolving a
series of problems related to starting up and
managing an ebusiness Activities students start
up, design, and operate e-businesses which
compete in the VE Shoppers use digital money to
purchase information products and services VE
a distributed digital marketplace simulating a
competitive environment for buying and
selling Teaching developing, implementing, using
and testing a curriculum based on problem based
learning
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The pedagogical approach PBL and the development
of a situated learning environment In starting
up, designing, and managing an ebusiness,
students face a complex and ill-structured
problem They work in small, self-directed teams
and investigate issues involved in creating
web-based ebusinesses Students are responsible
for determining what they need to learn to
develop and manage their ebusinesses They draw
upon a range of disciplines to resolve the
problems they face
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There are real-world benchmarks against which
student work can be evaluated Sales, repeat
customers, traffic reports, and customer
feedback Students apply what they learn to
the basic problem as it evolves over time This
is authentic learning because students
publicly exhibit their learning, and there are
often real life standards of quality (Gordon
1998 391) Outcome higher levels of
comprehension, more learning and
knowledge-forming skills, more social skills
(Rheem, 1999)
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Structure of the course and timeline for the
VE Week 1 Introduction Developing a start-up
company Week 2-7 Design, build, and test the
site 2 Present business plan, begin content
development 3 Database population, evaluation
of sites and development of initial
prototype 4 Development of advertising and
marketing plan 5 Final design online ad
auction 6,7 Presentation of customer service
and support strategies, testing and redesign (if
necessary) Week 8-15 Operate the storefronts
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Shoppers were business school students from the
following institutions (with participating
faculty) Australia University of Canberra Ric
Jentzsch University of Queensland Sophie
Cockcroft UK University of Bath Richard Vigden,
Joe Nandhakumar University of Greenwich
Margaret Lennox US The Citadel Janette Moody
Dusquesne University A. Graham Peace, William
Spangler Kennesaw State University Martha
Meyers Lehigh University Catherine
Ridings University of Oklahoma Laku
Chidambaram Georgia College and State
University Ric Bialac
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I. Introduction The virtual economy and
ecommerce II. Pedagogical strategy
What is problem based learning?
Structure of the course III. The student
experience in the VE Store
owners Shoppers
IV. How the VE works
Results and next steps
11
The student experience in the VE Store
owners Developed and implemented business plans
Designed working storefronts Designed
content pages (product descriptions, help
pages, etc) Used a template page to set up a
product catalog, transaction procedures, and
an order form Developed content Annotated
bibliographies and collections of articles,
web site reviews, newsletters, subscription
services, editing and consulting activities,
and entertainment
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They Created advertising and marketing
strategies, banner ads for the portal page,
sales, and other promotions Participated in
an ad auction Set up customer service and
loyalty programs Developed policies to
protect customer privacy, handle grievances,
complaints, and technical support Managed their
businesses Monitored store accounts, handled
customer service and support, and maintained
inventory Added and removed content and
redesigned sites
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Through their actions, store owners raised some
fascinating ethical issues They Took advantage
of the architecture of the VE Looked at each
others store directories Read each others
weekly reports Searched for pricing
information One group downloaded at least one of
another groups articles and sold it as their
own When do business practices cross the line
between competitive and unethical?
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The student experience in the VE Shoppers Had to
develop familiarity with ecommerce Used the VE
extensively Checked their accounts and
purchase histories Provided extensive feedback
to store owners and the instructor Committed
fraud Claimed files were corrupted or never
delivered Took advantage of closing strategies
Formed buying circles
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I. Introduction The virtual economy and
ecommerce II. Pedagogical strategy
What is problem based learning?
Structure of the course III. The student
experience in the VE Store
owners Shoppers
IV. How the VE works
Results and next steps
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Synergia information services
Vegas Casino entertainment
GetBusy information, services
DigiTeam collaboration services
SWOT.com information
GetBusy
Business Bistro bundled information
Succinct subscription
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Virtual Economy Spring 2001 Participants
Total shoppers 424 Unique shoppers 213 Stores
7 Total to be spent 848,000 Weeks
online 8 Total spent 218,269.31
(25.7) Total remaining 566,730.69
(74.3) Avg. left/shopper 1,336.63 Avg
spent/shopper 514.78
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Virtual Economy Spring 2001 Activity
Store Sales sales Transactions
transaction /transactions ve16 SWOT
21,089.00 9.7 643 28
32.80 ve17 Succinct 55,019.25 25.2
547 23 100.58 ve18 GetBusy
8,634.95 3.9 112 5
77.10 ve19 Vegas Casino 32,473.00 14.9
375 16 86.59 ve20 Business Bistro
60,066.86 27.8 310 13
195.70 ve21 Digiteam 4,175.00 1.9
139 6 30.04 ve22 Synergia
36,055.00 16.5 220 9
163.89 ve10 Test store 156.24
.07 4 0
39.06 Totals 218,269.31 100 2350 100
90.72
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VE Gross Revenues
ve2236,055
ve1621,089
ve1755,019.25
ve214,175
ve2060,066.86
ve188,634.96
ve1932,473
Total revenues 218,269,31
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VE Market share
ve2216.5
ve169.6
ve1725.2
ve211.9
ve2027.8
ve183.9
ve1914.9
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Revenues over time
Weeks
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VE Total transactions
ve16643 (27)
ve22220 (9)
ve21139 (6)
ve20310 (13)
ve19375 (16)
ve17547 (23)
ve18112 (5)
Total transactions 2350
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Transactions over time
Number of transactions
Weeks
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VE Average transaction in dollars
195.70
163.89
100.58
86.59
77.10
32.80
39.06
30.04
Average transaction in dollars 90.72
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VE Expenses
32,100
30,150
26,526
17,978
13,078
6,496
5,128
Expenses Auction Market report Web
hosting Consulting Refunds
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VE profits
94,981.25
100,170.86
61,077
50,011
45,323
23,108.96
14,075
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VE 2000 Final standings (profits)
Store Sales
Expenses Profits Rank
ve16 SWOT ve17 Succinct ve18 GetBusy ve19
Vegas Casino ve20 Business Bistro ve21
DigiTeam ve22 Synergia
21,089.00 55,019.25 8,634.95 32,473.00
60,066.86 4,175.00 36,055.00
13,078 5,128 26,526 30,150
6,496 32,100 17,978
50,011.00 94,981.00 23,108.96
45,323.00 100,170.86 14,075.00 61,077.00
4
2
6
5
1
7
3
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VE Summary of results
Sales Transactions
Profits
1. 2. 3. 4. 5. 6. 7.
Business Bistro Succinct Synergia Vegas
Casino SWOT GetBusy Digiteam
SWOT Succinct Vegas Casino Business
Bistro Synergia DigiTeam GetBusy
Business Bistro Succinct Synergia SWOT Vegas
Casino GetBusy DigiTeam
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Next steps Continue to improve the usability
and efficiency of the back end (working with
the Cold Fusion and Oracle database) Make the
experience more realistic Using an external
class as venture capitalists Developing more
products to sell to stores (traffic reports,
tables in the database, auction and chat
modules) Investigate research questions
Learning outcomes Examining scenarios of trust
building Factors affecting successful (usable
design)
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Explore variations in the running of the VE Have
a team from one or more universities develop
stores in the VE to compete with my
students Have distributed teams (at IU and other
universities) developing and managing stores)