Course Outline:  Economics of Electronic Commerce

COURSE CALENDAR

1. Introductory Lecture: Networks and Economics (PowerPoint format)
   
              Readings:
   

   Economides, N., "The Economics of Networks"

   In-Class Experiment  
   Instructions for experiment 
   Guidelines for Data Analysis
   Data from Experiment (MS Excel Spreadsheet)
   
   Mathematics Review (PDF format)
   
      

2. The Market for Digital Goods: An Overview (PowerPoint format)
      

   1. Product and Market Characteristics
         
      Readings:
         

      Shapiro and Varian, Chapter 1, The Information Economy Kaufman, L., "New Species, Old Struggle" (from The New York Times)

   2. Pricing Digital Goods
      
      Readings:

      S&V, Chapter 2, Pricing Information

3. Market Structure: 
     

   1. The Dominant Firm (PowerPoint format)
        
      Readings:

      S&V, Chapter 7, Network and Positive Feedback S&V, Chapter 9, Waging and Standards War

      Problem Set 1  (100 points)
      Solution to Problem Set 1
       
      
      

   2. Differentiated Product Oligopoly (PowerPoint format)
      
      Readings:
      
      

      S&V, Chapter 8, Cooperation and Compatibility Harmon, A., "Software to Track E-Mail Raises Privacy Concerns" (from The New York Times) Elliott, S., "Advertising: New Index on Internet Sponsorships" (from The New York Times) Hansen, E., "Online ad companies hit with privacy suits" (from The New York Times) Lohr, S., "Code Name: Mainstream" (from The New York Times)

      Problem Set 2  (100 points)
      Solution to Problem Set 2
       
      
      

   3. Open Source and Intellectual Property (PowerPoint format)
      
      Readings:
      
      

      Boldrin, M., and D. Levine, "The Case Against Intellectual Property" Boldrin, M., and D. Levine, Chapter 5 of Against Intellectual Monopoly: "The Devil in Disney" Opensource.org, "The Business Case for Open Source" Lerner, J. and J. Tirole, "The Simple Economics of Open Source" Holson, L. M., "Which Direction for Digital Music?" (from The New York Times) S&V, Chapter 4, Rights Management Adar, E., and B. Huberman, "Free Riding on Gnutella" Boynton, R. S., "The Tyranny of Copyright?" (from The New York Times Magazine)

4. Debate Materials:
       Topic and guidelines for research
       Team Assignments
          
   

5. Clicks and Mortar: Information and Efficiency (PowerPoint format)
   

1. Price Discrimination
   
   Readings:
   
   

   S&V, Chapter 3, Versioning Information Krugman, P., "What Price Fairness" (from The New York Times) Gleick, J., "Tangled Up In Spam" (from The New York Times Magazine)

   Problem Set 3  (50 points)
   Solution to Problem Set 3

   
   

2. Intermediation and the Internet
   
   Readings:
   
   

   Deutsch, C., "Efficiencies Found Online Help Companies Build Profits Offline" (from The New York Times) Tedeschi, B., "Lessons From the Online Rubble" (from The New York Times) Bradsher, K., "3 Automakers Plan Private Online Purchasing System" (from The New York Times) McAfee, R. P. and J. McMillan, "Auctions and Bidding" The Economist, "New Life in the Buying Department" The Economist, "Trying to Connect You" Wired Magazine, "Secret of Googlenomics: Data-Fueld Recipe Brews Profitability"

6. Electronic Payment Systems (PowerPoint format)

   
   

7. Online Financial Services (PowerPoint format)

   Readings:

    

   EDGAR (Maintained by the U.S. Securities and Exchange Commission)  Notes on Asset Pricing Video: Trillion Dollar Bet (WGBH, Boston) "How Did They Value Stocks? Count the Absurd Ways" (from The New York Times)

   Asset Market Simulation Project

   Market Dynamics
   
   Guidelines for Asset Market Project report

   Portfolio spreadsheet
   

Problem Set 4 (100 points) 
Solution to Problem Set 4

8. Search (PowerPoint format)
   
   Readings:

    

   "Hypersearching the Web" (Scientific American, June 1999)  "Revving Up the Search Engines to Keep the E-Aisles Clear" (Lisa Guernsey, from The New York Times) "A Farewell to Keywords" (Gary Styx, Scientific American, July 2006) Hypersearch spreadsheet

9. Internet Infrastructure and Pricing (PowerPoint format)
   
   Readings:

    

   Gupta, A., D. Stahl, and A. Whinston,  "Managing the Internet as an Economic System" "Congestion Pricing More Profitable than AOL Pricing" (Center for Research in Electronic Commerce, University of Texas at Austin) Hahn, R.W., and S Wallsten, "The Economics of Net Neutrality" (From The Economists Voice)

   
   

10. Electronic Commerce and Economic Policy (PowerPoint format)
    
    Readings:

S&V, Chapter 10, Information Policy Daley, W.M., Privacy and Self-Regulation in the Information Age (U.S. Department of Commerce White Paper) "Microsoft could win, legal experts say" (Joe Wilcox, from The New York Times) "Market Place: Fed Credits a New Economy With Altering Old Patterns" (David Leonhardt, from The New York Times)

Final Exam - Fall 2008