MIS40890 Economics of Information Technology and Digital Markets

Academic Year 2017/2018

The digital or information revolution of the last decades is often compared to the Industrial Revolution as both have changed the nature of economic activity, resulting in dramatic social, psychological and other consequences. A revolution of this scale challenges us also intellectually, in particular in the context of business schools that attempt to educate the next generation of business leaders. This module addresses the challenge by studying the fundamental insights relevant to information coming from one academic discipline, Economics. These insights are then applied to a wide range of current economic aspects of information technology and digital markets. We will read several seminal research papers in the areas of Information Economics, Transaction Cost Economics and Behavioural Economics. We will discuss asymmetric information and how it influences prices (Akerlof 1970), informational efficient markets (Fama 1970), network externalities and the creation of winner take all markets (Coase 1937, Katz and Sapiro 1985), and briefly discuss markets where supply and demand are not balanced by price but on information (Roth 1984). Students are required to read Information Rules: A Strategic Guide to the Network Economy by Carl Shapiro and Hal Varian (1999). We then apply these ideas to today's digital ecosystems by reviewing information goods (pricing, versioning, and bundling), network markets (the long tail, tippy markets, and standard wars) and new organizational forms (crowdsourcing, open source, platforms and ecosystems, and the sharing economy). Moreover, since prevalent business models are driven by online advertising and ecommerce, we will discuss some basic relevant tools and techniques, such as search engines, social media, content marketing and programmatic advertising.

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Curricular information is subject to change

Learning Outcomes:

You should be able to apply principles covered in this subject to real-life cases and to analyze the effects of information on economic transactions, the effect of networks and technological platforms and the implications of pricing and bundling of information goods. History/context: Understand foundations of economic theory and the role of information in markets, services and products. Models and tools: Demonstrate familiarity with economic models of information technology and digital markets. Advise on features, versions, pricing, contracting, consumption. Research/analysis: Analyse, interpret and understand characteristics of information products and services in digital markets. Understand usage, consumption, performance, etc. of information goods by users, producers and consumers of these goods and services. Skill and critical thinking: Apply models and approaches to practical examples.

Student Effort Hours: 
Student Effort Type Hours
Seminar (or Webinar)

24

Specified Learning Activities

56

Autonomous Student Learning

120

Total

200

 
Requirements, Exclusions and Recommendations

Not applicable to this module.



 
Description % of Final Grade Timing
Examination: Final examination

100

2 hour End of Trimester Exam

Compensation

This module is not passable by compensation

Resit Opportunities

In-semester assessment

Remediation

If you fail this module you may repeat, resit or substitute where permissible.

Name Role
Dr Yossi Lichtenstein Lecturer / Co-Lecturer
Mark Thompson Lecturer / Co-Lecturer
Dr Moshe Yonatany Lecturer / Co-Lecturer