Week 1 (Sep 8):

Topics: Course overview; Economics of IT; Anatomy of an economic model [slides]

Readings for Week 2:

• S. Keshav, How to read a paper, ACM Sigcomm Computer Communication Review, July 2007.
• Varian, H. Markets for Information Goods. Prepared for Bank of Japan conference, June 18-19, 1998. In conference proceedings: Monetary Policy in a World of Knowlege-Based Growth, Quality Change, and Uncertain Measurement, 2000.
• Luenberger, D., Markets, Chapter 7 of Information Science, Princeton University Press, 2006.
  

Week 2 (Sep 15):

Discussion: Review of economic modeling

Lecture: Economics of Information Goods -- supply and demand, economies of scale, network effects [slides]

Readings for Week 3:

• Varian, H., Economics of Information Technology. Mattioli Lecture at Bocconi University, Milan, Italy, 2001. (You can skim or skip Sections 5 & 6 this week; since we'll cover these topics next week.)
  
• Sundararajan, A. Network Effects, part of the Industrial Organization of Information Technology Industries web site.

Additional Optional Readings:

• John Perry Barlow, The Economy of Ideas, Wired 2.03, 1994.
• Varian, Buying, Sharing and Renting Information Goods.

Week 3 (Sep 22):

Discussion: Economics of Information Goods

Lecture: Business strategies -- pricing, versioning, bundling, lock-in [slides]

Readings for Week 4:

• Varian, H. Pricing information goods. Presented at the Research Libraries Group Symposium on "Scholarship in the New Information Environment" held at Harvard Law School, May 2-3, 1995.
• Shapiro and Varian, Versioning: The Smart Way to Sell Information, Harvard Busines Review, 1998.
• 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.
  
• Varian, H., Economics of Information Technology. Mattioli Lecture at Bocconi University, Milan, Italy, 2001. Focus on Section 6 on switching costs and lock-in. Section 5 can serve as a good complement to the earlier readings.
  
• Farrell and Klemperer, Coordination and Lock-In: Competition with Switching Costs and Network Effects. 2001. Read Sections 1, 2.1, 3.1, 4, and as much as the rest of Sections 2 and 3 as you are able.
  

Additional Optional Readings:

• Shapiro, C. and Varian, H., Information Rules: A Strategic Guide to the Network Economy, 1998. Chapters 2 & 3.
  
• Varian, H., Versioning Information Goods. 1997.
  
• 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.
  
• Bakos, Y. and Brynjolfsson, E. (December, 1999) Bundling Information Goods: Pricing, Profits and Efficiency, Management Science, Vol. 45, No. 12, pp. 1613-1630.
• Bakos, Y. and Brynjolfsson, E. (January, 2000) Bundling and Competition on the Internet, Marketing Science, Vol. 19, No. 1, pp. 63-82.
• Acquisti, A., Varian, H., Conditioning Prices on Purchase History, Marketing Science 24:3, 367-381, 2005.
• Chen and Hitt, Information Technology and Switching Costs, Handbook of Information Systems Economics, 2005.
  

Week 4 (Sep 29):

Discussion: Business strategies [discussion questions]

Lecture: New business models -- economics of 'free'; the Long Tail [slides]

Readings for Week 5:

• Anderson, C., The Long Tail, Wired 12.10, Oct 2004.
  
• Brynjolfsson, Erik, Yu Jeffrey Hu, Michael D. Smith. 2006. From Niches to Riches: The Anatomy of the Long Tail. Sloan Management Review, 47(4) 67-71.
  
• Anderson, C., Economics of free: Free! Why $0.00 Is the Future of Business. Wired 02.25.08.
• Smith, Michael D. and Telang, Rahul, Competing with Free: The Impact of Movie Broadcasts on DVD Sales and Internet Piracy (April 2008).
  

Additional Optional Readings:

• Elberse, A., Should You Invest in the Long Tail? Harvard Business Review, 2008.
• Erik Brynjolfsson, Yu Jeffrey Hu, and Michael D. Smith, Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers, Management Science, 2003.
  
• Brynjolfsson, Erik, Hu, Yu Jeffrey and Simester, Duncan, "Goodbye Pareto Principle, Hello Long Tail: The Effect of Search Costs on the Concentration of Product Sales" MIT Center for Digital Business Working Paper, (December 2006).
• Shiller and Waldfogel, Music for a Song: An Empirical Look at Uniform Song Pricing and its Alternatives, 2008.
  
  

Week 5 (Oct 6):

Discussion: New business models [discussion questions]

Lecture: Economics of the Internet [slides]

Readings for Week 6:

• Economides, N., Economics of the Internet, Palgrave Dictionary, 2007. NET Institute Working Paper No. 07-01.
  
• Philip Weiser, Jon Nuechterlein. The Big Picture. Chapter 1 of Digital Crossroads: American Telecommunications Policy in the Internet Age, MIT Press 2005.
• Verizon's FiOS: A Smart Bet or a Big Mistake?, The New York Times, August 19, 2008.
  
• David Clark, A simple cost model for broadband access: What will video cost? TPRC, September 2008.

Additional Optional Readings:

• B. Briscoe, A. Odlyzko, and B. Tilly, Metcalfe's Law is Wrong, IEEE Spectrum, July 2006, pp. 26-31.
• Odlyzko, A., Data networks are lightly utilized, and will stay that way, Review of Network Economics, 2 (no. 3), September 2003, pp. 210-237.
• A. Odlyzko, Pricing and architecture of the Internet: Historical perspectives from telecommunications and transportation, Telecommunications Policy Research Conference (TPRC) 2004.
• U.S. Department of Justice and the Federal Trade Commission, Horizontal Merger Guidelines, issued 1992, revised 1997.
  

Week 6 (Oct 13):

Discussion: Economics of the Internet [discussion questions]

Lecture: Telecommunications Regulation and Policy [slides][pdf]

Readings for Week 7:

• Jon Peha, The Benefits and Risks of Mandating Network Neutrality, and the Quest for a Balanced Policy. Telecommunications Policy Research Conference (TPRC) 2006.
• Peter Eckersley, Fred von Lohmann and Seth Schoen, Packet Forgery By ISPs: A Report on the Comcast Affair, Electronic Frontier Foundation Whitepaper, Nov 2007.
• A. Odlyzko. The delusions of net neutrality, Telecommunications Policy Research Conference, Sep 2008.
  

Additional Optional Readings:

• Wikipedia article on Network Neutrality, http://en.wikipedia.org/wiki/Network_neutrality
  
• Tim Wu, Network Neutrality, Broadband Discrimination, Journal of Telecommunications and High Technology Law, Vol. 2, p. 141, 2003.
• Papers from the Telecommunications Policy Research Conference (TPRC).
  

Week 7 (Oct 20):

Discussion: Telecommunications Policy [discussion questions]

Lecture: Economics of peer production; introduction to game theory [slides][pdf]

Readings for Week 8:

• Wikipedia articles this week!!
• Peer production: http://en.wikipedia.org/wiki/Peer_production
• Public good: http://en.wikipedia.org/wiki/Public_good
  
• Free-riding: http://en.wikipedia.org/wiki/Free_rider_problem
• Tragedy of the Commons: http://en.wikipedia.org/wiki/Tragedy_of_the_commons
  
• Game Theory: http://en.wikipedia.org/wiki/Game_theory
• Prisoner's dilemma: http://en.wikipedia.org/wiki/Prisoner%27s_dilemma
• Diner's dilemma: http://en.wikipedia.org/wiki/Diner%27s_dilemma
• Coordination game: http://en.wikipedia.org/wiki/Coordination_game
• More games: http://en.wikipedia.org/wiki/List_of_games_in_game_theory
  

Additional Optional Readings:

• Kevin Leyton-Brown, Yoav Shoham, Essentials of Game Theory: A Concise Multidisciplinary Introduction, Morgan & Claypool Publishers, 2008. (Google Book Search allows you to preview this book.)
  
• E. Tardos and V. Vazirani, Basic Solution Concepts and Computational Issues, Chapter 1, Sections 1.1 to 1.3 of N. Nisan, T. Roughgarden, E. Tardos, V. Vazirani, eds., Algorithmic Game Theory, Cambridge University Press, 2007. (Skim the rest of Chapter 1 if you wish.)

Week 8 (Oct 27):

Discussion: Economics of peer production

Lecture: Incentive-centered design; Reputation and recommender systems [slides][pdf]

Readings for Week 9:

• M. Babaioff, J. Chuang, M. Feldman. Incentives in Peer-to-Peer Systems, Chapter 23 of N. Nisan, T. Roughgarden, E. Tardos, V. Vazirani, eds., Algorithmic Game Theory, Cambridge University Press, 2007. (Skim Sections 23.6.1 and 23.6.2)
• Resnick, Paul, Zeckhauser, Richard, Friedman, Eric, and Kuwabara, Ko. Reputation Systems. Communications of the ACM, 43(12), December 20000, pages 45-48.
  
• Chrysanthos Dellarocas, The Digitization of Word of Mouth: Promise and Challenges of Online Feedback Mechanisms, Management Science, 2003.
  

Additional Optional Readings:

• Cohen, B. Incentives build Robustness in BitTorrent. Workshop on Economics of Peer-to-Peer Systems (P2PEcon), Berkeley CA, 2003.
  
• M. Feldman, K. Lai, I. Stoica, and J. Chuang, Robust Incentive Techniques for Peer-to-Peer Networks. Proceedings of 5th ACM Conference on Electronic Commerce (EC'04), New York NY, May 2004.
• M. Feldman, J. Chuang, The Evolution of Cooperation under Cheap Pseudonyms, Proceedings of 7th International IEEE Conference on E-Commerce Technology (CEC'05), July 2005.
• 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.
• Resnick, P., R. Zeckhauser, Trust Among Strangers in Internet Transactions: Empirical Analysis of eBay's Reputation System. The Economics of the Internet and E-Commerce. Michael R. Baye, editor. Volume 11 of Advances in Applied Microeconomics. Amsterdam, Elsevier Science. 2002. pp. 127-157.

Week 9 (Nov 3):

Discussion: Incentive-centered design; Reputation and recommender systems [discussion questions]

Lecture: Economics of information -- information asymmetry, value of information [slides][pdf]

Readings for Week 10:

• Levitt and Dubner, Cracking the Real Estate Code, Wired, May 2005.
  
• 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.)
  
• Eeckhoudt, L., Godfroid, P., Risk Aversion and the Value of Information, Journal of Economic Education, 2000.
  

Additional Optional Readings:

• Akerlof, G., Writing the "The Market for 'Lemons'": A Personal and Interpretive Essay, 2003.
  
• Feldman, Chuang, Stoica, Shenker, Hidden action in network routing. IEEE JSAC, 2007.
  

Week 10 (Nov 10):

Discussion: Economics of information [discussion questions]

Lecture: Economics of search [slides][pdf]

Readings for Week 11:

• Varian, H., The Economics of Internet Search, Angelo Costa lecture delivered in Rome, February 2007.
• Varian, H., Our secret sauce. The official Google Blog, 2.25.2008.
• Lahaie, Pennock, Saberi, Vohra, Sponsored Search Auctions, Chapter 28 of N. Nisan, T. Roughgarden, E. Tardos, V. Vazirani, eds., Algorithmic Game Theory, Cambridge University Press, 2007.
  

Additional Optional Readings:

• Baye, Michael, John Morgan and Patrick Scholten, Information, Search, and Price Dispersion, in Handbook on Economics and Information Systems, T. Hendershott, Ed., Elsevier, forthcoming.
• Edelman, Ostrovsky, and Schwarz, Internet Advertising and the Generalized Second Price Auction: Selling Billions of Dollars Worth of Keywords, American Economic Review, v. 97(1), March 2007, pp.242-259.
• Varian, Position Auctions, International Journal of Industrial Organization, Oct 2006.
  
• Fain, D. C. and Pedersen, J. O. 2006. Sponsored Search: A Brief History. Bulletin of the American Society for Information Science and Technology. 32(2), 12-13.
  

Week 11 (Nov 17):

Discussion: Economics of search [discussion questions]

Lecture: Platform competition; Two-sided Markets [slides][pdf]

Readings for Week 12:

• Eisenmann, T., Parker, G., Van Alstyne, M., Strategies for Two-Sided Markets, Harvard Business Review, 2006, Reprint R0610F.
  
• Eisenmann, T., Parker, G., Van Alstyne, M., Platform Envelopment, HBS Working Paper 07-104.

Additional optional readings:

• Joseph, Shetty, Chuang, Stoica, Modeling the Adoption of New Network Architectures, ACM CoNEXT, 2007.
• Rochet and Tirole, Platform Competition in Two-Sided Markets, Journal of the European Economic Association, 2003.
  
• Armstrong, M. Competition in Two-Sided Markets. RAND Journal of Economics, vol. 37(3), pages 668-691, Autumn 2006.
• Cusumano, M., Technology Strategy and Management: The Puzzle of Apple, CACM, September 2008.
• Haque, U., What Apple Knows That Facebook Doesn't, Edge Economy, Aug 2008.
  

Week 12 (Nov 24):

Discussion: Platform competition; Two-sided Markets [discussion questions]

Lecture: Economics of security and privacy [slides][pdf]

Readings for Week 13:

• Anderson and Moore, Information Security Economics - and Beyond. 2008.
• Hal Varian, System Reliability and Free-Riding, In Economics of Information Security, Camp, L. Jean; Lewis, Stephen (Eds.), Springer 2004.
  
• Alessandro Acquisti and Jens Grossklags, What Can Behavioral Economics Teach Us About Privacy?. In Alessandro Acquisti, Sabrina De Capitani di Vimercati, Stefanos Gritzalis, Costas Lambrinoudakis (eds), Digital Privacy: Theory, Technologies and Practices, Auerbach Publications, 363-377, 2007.
  

Additional Optional Readings:

• J. Grossklags, N. Christin, J. Chuang. Secure or Insure? A Game-Theoretic Analysis of Information Security Games. Proceedings of the 17th International World Wide Web Conference (WWW2008), April 2008.
• Anderson, R., Why Information Security is Hard: An Economic Perspective, 17th Annual Computer Security Applications Conference, December 10-14, 2001
  
• Anderson, R., website on Economics and Security Resource Page.
  
• Acquisti, A., website on The Economics of Privacy.
• Papers from the Workshop on Economics and Information Security (WEIS).
  

Week 13 (Dec 1):

Discussion: Economics of security and privacy

Project presentations (10 minutes per group; email ppt to John before noon on Dec 1) [powerpoint template]:

• Bob Bell and Ashwin Mathew: Internet Infrastructure in Africa
  
• Ben Cohen and Joyce Tsai: Economics of Manga
  
• Anuradha Roy and Gopal Vaswani: Economics of News
  

Course review and evaluation [slides][pdf]

Week 14 (Dec 8):

Project presentations (10 minutes per group; email ppt to John before noon on Dec 8) [powerpoint template]:

• Becky Hurwitz, James Tucker, Patrick Wheeler: Economics of Censorship
  
• Kesava Mallela: Location-aware Coupons
  
• Dipti Desai: Peer-to-peer lending
  
• Pierre Tchetgen: Agriculture in Cameroon
  
• Matt Gedigian and Neha Kumar: Mobile "missed calls" in the developing world.
  
• Karen Nomorosa and Luke Rhee: Economics of Software as a Service
• Abe Coffman, Joshua Gomez, Ashkan Soltani: Frameworks to Assess the Value of Personal Information
• Ruchi Kumar, Ben Moskowitz, Kentaro Suzuki: Strategy and policy recommendations for stakeholders in the online video age
• Josh Blumenstock: Modeling P2P Demand
  
• Hyunwoo Park: Social networking platform competition simulation
  

Friday Dec 12: Project Report due (email to John)