INFO 234. Information Technology Economics, Strategy, and Policy

Spring 2014

Tentative Schedule and Readings (Subject to Change)

Lecture slides will be available here 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; Economics of information goods, services, platforms

January 21: Course Overview
January 21: Assignment 1 posted

January 23: Economies of Scale and Scope
  • Read: McAfee, P. Introduction to Economic Analysis, Version 2, 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.]

Week 2. Economics of information goods, services, platforms

January 28: Economic Modeling and Analysis
January 28: Assignment 1 due; Assignment 2 posted

January 30: 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.
  • Read: 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.

Week 3. Business Strategy

February 4: Business strategy: strategic pricing
February 6: Versioning and Bundling
February 6: Assignment 2 due; Assignment 3 posted

Week 4. Business Strategy

February 11: Price Conditioning
February 13: Economics of Free

Week 5. Business Strategy

February 18: Competition Models
  • Read: McAfee, P., Introduction to Economic Analysis. 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

February 20: Game Theoretic Models
February 20: Assignment 4 posted

Week 6. Business Strategy and Industry Structure

February 25: Complements and Substitutes
February 27: Platforms and Two-Sided Markets

Week 7. Industry Structure

March 4: Loci of Competition
March 4: Assignment 4 due; Assignment 5 posted

March 6: Market Power

Week 8. Industry Structure

March 11: 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 13: Regulation & Network Neutrality
March 13: Assignment 5 due; Assignment 6 posted

Week 9. Economics of Information

March 18: Value of Information
March 20: Information Asymmetries

Week 10. Spring Break

March 25: No Class

March 27: No Class

Week 11. Patterns: Long Tail

April 1: Long tail, search, and recommendation
April 1: Assignment 6 due

April 3: Long tail, search, and recommendation

Week 12. Patterns: Epidemics

April 8: Network cascades and social epidemics
April 10: Network cascades and social epidemics

Week 13. Patterns: Networks; Peer Production

April 15: Network structure, network formation
April 17: Peer production and crowdsourcing

Week 14. Patterns: Peer Production; Privacy

April 22: Peer production and crowdsourcing
April 24: Economics of privacy

Week 15. Patterns: Interdependency

April 29: Interdependent security
May 1: Interdependent security; Course review and evaluation
  • Optional: P. Chia, J. Chuang. Colonel Blotto in the Phishing War. Proceedings of 2nd International Conference on Decision and Game Theory for Security (GameSec 2011), November 2011.

Week 16. RRR Week

May 6: No Class

May 8: No Class

Week 17. Finals Week

May 13: Final Project due