The Dot.com Boom (and Bust): Some Tentative Explanations
Salimi, Rashelle E.
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This project aims to combine the expertise of Dr. Schneider and Dr. Kretschmer as investment bankers and industrial economists. Dr. Schneider has been working on pricing models (options, interest-rate and other derivatives) in the last few years, while Dr. Kretschmer has done work on network industries in general and the mobile phone and PC operating systems industry in particular. Looking at a network market (or a number of them) from an option-pricing angle is one way to explain the phenomena that a conventional industrial economist or even financial analyst might not be able to explain. My contribution to this work was gathering historical information on concrete examples of internet-based markets with several competitors (e.g. auction websites) and collating and writing up this information. I also conducted interviews with a few investors to get different viewpoints on the dot. com boom and bust. Other duties of mine included gathering financial information on these markets and summarizing them for both Dr. Kretschmer and Dr. Schneider to validate their option pricing model.