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 23: Course Overview
January 23: Assignment 1 posted
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Week 2. Economics of information goods, services, platforms
January 28: Economies of Scale and Scope
- Read: McAfee, P., et al., Introduction to Economic Analysis, Version 2.1, 2009. 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.]
January 30: Economic Modeling and Analysis
January 30: Assignment 1 due; Assignment 2 posted
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Week 3. Network Effects, Switching Costs, Strategic Pricing
February 4: 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: Varian, H., Section 6 "Switching costs and lock-in" in Economics of Information Technology. Mattioli Lecture at Bocconi University, Milan, Italy, 2001.
February 6: Business strategy: strategic pricing
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Week 4. Business Strategy: Pricing, Bundling
February 11: Price Discrimination
February 13: Bundling
- Read: Bakos and Brynjolfsson, Aggregation and Disaggregation of Information Goods: Implications for Bundling, Site Licensing and Micropayment Systems, in Varian and Kahin, Eds. Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property, MIT Press, 2000.
- Optional: Chuang, J. and Sirbu, M., Optimal Bundling Strategy for Digital Information Goods: Network Delivery of Articles and Subscriptions. Information Economics and Policy 11(2):147-176, 1999.
February 13: Assignment 2 due; Assignment 3 posted
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Week 5. Business Strategy: Versioning
February 18: President's Day -- No Class
February 20: 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.
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Week 6. Business Strategy: Price Conditioning; Models of Competition
February 25: Price Conditioning
- Read: Loveman, G., Diamonds in the Data Mine, Harvard Business Review, 2003.
- Read: Acquisti, A., Varian, H., Conditioning Prices on Purchase History, Marketing Science 24:3, 367-381, 2005.
- Optional: Johnson, B., Laskowski, P., Maillart, T., Chuang, J. and N. Christin, Caviar and Yachts: How Your Purchase Data May Come Back to Haunt You, 14th Workshop on the Economics of Information Security (WEIS'15), June 2015.
February 27: Competition Models
February 27: Assignment 3 due; Assignment 4 posted
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Week 7. Models of Competition: Game Theory
March 4: Game Theoretic Models
March 6: Game Theoretic Models
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Week 8. Complements, Substitutes, and Platforms
March 11: Complements and Substitutes
March 13: Platforms and Two-Sided Markets
- Read: Cusumano, M., Technology Strategy and Management: The Puzzle of Apple, Communications of the ACM, September 2008.
- Read: Eisenmann, T., Parker, G., Van Alstyne, M., Strategies for Two-Sided Markets, Harvard Business Review, 2006.
- Read: Eisenmann, T., Parker, G., Van Alstyne, M., Platform Envelopment, Strategic Management Journal, 2011.
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Week 9. Industry Structure
March 18: Loci of Competition
March 18: Assignment 4 due; Assignment 5 posted; Final Project posted
March 20: Market Power
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Week 10. Spring Break
March 25: No Class
March 27: No Class
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Week 11. Industry Structure
April 1: Vertical Control
April 3: Guest Lecture and Group Exercise on Platform Design (Dr. Andrew Brooks)
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Week 12. Regulation; Economics of Information
April 8: Regulation & Network Neutrality
April 8: Assignment 5 due; Assignment 6 posted
April 10: Value of Information
- Read: Varian, H., Artificial Intelligence, Economics, and Industrial Organization, NBER Working Paper, 2017.
- Read: Carter, M.P., The valuing of management information. Part I: The Bayesian approach. Journal of Information Science, 10:1, 1985.
- Optional: Berger, J. O., Statistical decision theory, The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008.
- Optional: Eeckhoudt, L., Godfroid, P., Risk Aversion and the Value of Information, Journal of Economic Education, 2000.
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Week 13. Economics of Information
April 15: Information Asymmetries
- Read: Levitt and Dubner, Cracking the Real Estate Code, Wired, May 2005.
- Skim: Akerlof, G. A. (1970). The Market for "Lemons": Quality Uncertainty and the Market Mechanism. The Quarterly Journal of Economics 84(3): 488-500. (This is one of the select few journal articles that have their own Wikipedia articles.)
- Optional: Feldman, M., Chuang, J. Stoica, I. Shenker, S. Hidden action in network routing. IEEE Journal for Selected Areas in Communications, 2007.
April 17: Economics of privacy
- Read: Acquisti, A. The Economics of Privacy: Theoretical and Empirical Aspects. In Privacy, Big Data, and the Public Good: Frameworks for Engagement, Julia Lane, Victoria Stodden, Stefan Bender, and Helen Nissenbaum (editors), Cambridge University Press, 2014.
- Read: Bruce Schneier. Data is a toxic asset, so why not throw it out?. CNN, March 2016.
- Skim: Alessandro Acquisti, Leslie John, and George Loewenstein. What is privacy worth?. The Journal of Legal Studies, June 2013.
- Optional: Gergely Biczok, Pern Hui Chia. Interdependent Privacy: Let Me Share Your Data. Proceedings of Financial Cryptography 2013: 338-353.
- Optional: Bruce Schneier. A Revised Taxonomy of Social Networking Data, 2010.
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Week 14. Economics of Security; Network Cascades
April 22: Economics of information security
April 22: Assignment 6 due
April 24: Network cascades and social epidemics
- Read: Easley, D. and Kleinberg, J. Networks, Crowds, and Markets. Reasoning about a Highly Connected World. Cambridge University Press, 2010. Chapter 19, "Cascading Behavior in Networks", Sections 19.1-19.2.
- Skim: Salganik, M., Dodds, P., Watts, D., Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market, Science, Feb 2006.
- Skim: Easley, D. and Kleinberg, J. Networks, Crowds, and Markets. Reasoning about a Highly Connected World. Cambridge University Press, 2010. Chapter 21, "Epidemics", Sections 21.1-21.3.
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Week 15. Network Structure; Peer Production
April 29: Network structure, network formation
- Read: Jackson, Matthew O. "network formation." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008.
- Review: Easley, D. and Kleinberg, J. Networks, Crowds, and Markets. Reasoning about a Highly Connected World. Cambridge University Press, 2010. Chapter 1, "Graphs".
- Skim: Easley, D. and Kleinberg, J. Networks, Crowds, and Markets. Reasoning about a Highly Connected World. Cambridge University Press, 2010. Chapter 13, "The Structure of the Web".
- Skim: Easley, D. and Kleinberg, J. Networks, Crowds, and Markets. Reasoning about a Highly Connected World. Cambridge University Press, 2010. Chapter 20, "The Small World Phenomenon".
- Skim: Johan Ugander, Brian Karrer, Lars Backstrom, Cameron Marlow. The Anatomy of the Facebook Social Graph. arXiv:1111.4503, Nov 2011.
May 1: Peer production
- Skim: Luis Von Ahn. Games with a Purpose. IEEE Computer, 2006.
- Skim: Braess's paradox. Wikipedia.
- Skim: P. Chia, J. Chuang. Community-based Web Security: Complementary Roles of the Serious and Casual Contributors. Proceedings of ACM CSCW, February 2012.
- Optional: M. Feldman, C. Papadimitriou, J. Chuang, and I. Stoica, Free-Riding and Whitewashing in Peer-to-Peer Systems. IEEE Journal on Selected Areas in Communications, Vol. 24, No. 5, May 2006.
- Optional: Wilkinson, D. Strong Regularities in Online Peer Production, Proceedings of ACM Conference on E-Commerce, July 2008.
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Week 16. RRR Week
May 6: No Class
May 8: No Class
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Week 17. Finals Week
May 13: Final Project Report due
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