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INFO 234. Information Technology Economics, Strategy, and Policy

Spring 2016


Tentative Schedule and Readings (Subject to Change)

Assignments and projects are posted on bCourses.

Lecture slides will be available on bCourses at the beginning of lecture.

Many of the assigned readings are licensed by the UC Berkeley Library, and can be accessed from a computer with a campus IP address. You can also access these materials from off-campus by using the library's proxy server.

Reading assignments will be adjusted throughout the course of the semester.

Week 1. Introduction

January 19: Course Overview
January 19: Assignment 1 posted

January 21: Economies of Scale and Scope
  • Read: McAfee, P., et al., Introduction to Economic Analysis, Version 2, 2009 [PDF]. Section 10.2 on "Economies of Scale and Scope". [This book is released under a CC 3.0 license. It serves as a good microeconomics reference at the introductory/intermediate level.]

  • Optional: Luenberger, D. Markets, Chapter 7 of Information Science, Princeton University Press, 2006. [Brief intro/refresher of basic microeconomics concepts]
  • Optional: John Perry Barlow, The Economy of Ideas, Wired 2.03, 1994. [Visionary of his time.]

Week 2. Economics of information goods, services, platforms

January 26: Economic Modeling and Analysis
January 28: Network Effects and Switching Costs
  • Read: Shapiro, C. and Varian, H. Network Effects, Notes to accompany Information Rules: A Strategic Guide to the Network Economy, Harvard Business School Press, 1998.

  • Skim: Briscoe, B., Odlyzko, A., and Tilly, B. Metcalfe's Law is Wrong. IEEE Spectrum, July 2006, pp. 26-31.
  • Optional: Sundararajan, A. Network Effects, part of the Industrial Organization of Information Technology Industries web site.
  • Optional: Varian, H., Section 6 "Switching costs and lock-in" in Economics of Information Technology. Mattioli Lecture at Bocconi University, Milan, Italy, 2001.
January 28: Assignment 1 due; Assignment 2 posted

Week 3. Business Strategy

February 2: Business strategy: strategic pricing
February 4: Price Discrimination
February 4: Assignment 2 due; Assignment 3 posted

Week 4. Business Strategy

February 9: Bundling
February 11: Versioning
  • Read: Shapiro, C. and Varian, H. Versioning: The Smart Way to Sell Information Harvard Business Review, 1998.

  • Optional: Shapiro, C. and Varian, H. Versioning, Notes to accompany Information Rules: A Strategic Guide to the Network Economy, Harvard Business School Press, 1998.

Week 5. Business Strategy; Competition Models

February 16: Price Conditioning; Economics of Free
February 18: Competition Models
  • Read: McAfee, P., et al., Introduction to Economic Analysis, Version 2, 2009 [PDF]. Sections 17.1 - 17.2 on "Cournot Oligopoly".
  • Optional: Tirole, J. The Theory of Industrial Organization. Cambridge, MA: MIT Press, 1988, Chapter 5 "Short-Run Price Competition", pp. 133-152. ISBN: 9780262200714.
February 18: Assignment 3 due; Assignment 4 posted

Week 6. Competition Models

February 23: Game Theoretic Models
February 25: Game Theoretic Models

Week 7. Business Strategy & Industry Structure

March 1: Complements and Substitutes
March 3: Platforms and Two-Sided Markets

Week 8. Industry Structure

March 8: Loci of Competition
March 10: Market Power
March 10: Assignment 4 due; Assignment 5 posted

Week 9. Industry Structure; Policy and Regulation

March 15: Vertical Control
  • Read: U.S. Department of Justice, Non-Horizontal Merger Guidelines, June 14, 1984.

  • Optional: Tirole, J. The Theory of Industrial Organization. Cambridge, MA: MIT Press, 1988, Chapter 4 "Vertical Control", ISBN: 9780262200714.
March 17: Regulation & Network Neutrality
March 17: Assignment 5 due; Assignment 6 posted

Week 10. Spring Break

March 22: No Class

March 24: No Class

Week 11. Economics of Information

March 29: Value of Information
March 31: Information Asymmetries

Week 12. Economics of Privacy and Security

April 5: Economics of privacy
April 7: Economics of information security
April 7: Assignment 6 due

Week 13. Long Tail, Epidemics

April 12: Long tail, search, and recommendation
April 14: Network cascades and social epidemics

Week 14. Epidemics and Network Structure

April 19: Network cascades and social epidemics
April 21: Network structure, network formation

Week 15. Peer Production

April 26: Peer production and crowdsourcing
April 28: Peer production and crowdsourcing; Course review and evaluation

Week 16. RRR Week

May 3: No Class

May 5: No Class

Week 17. Finals Week

May 10: Final Project due