COURSE : INFORMATION ECONOMICS /
ECONOMIE DE L’INFORMATION
MASTER 1 IN ECONOMICS
Year 2004/2005
Lecturers :
Dr. B. DUMONT (University of Rennes I, CREM-CNRS, [email protected])
Dr. E. MALIN (University of Rennes I, CREM-CNRS, [email protected])
Description :
This course is designed to give students an understanding of the issues related to economical impacts of
production and utilisation of information and value of information in managing businesses. Another objective is
to familiarize the students with most central economic theories used to understand the impacts of information
systems in business. This will be achieved through topical articles where these theories are applied. This
integrating advanced level course is accomplished through readings and discussion, and independent studying is
of great importance.
Required courses :
Basic knowledge of economics (intermediate microeconomics, industrial organisation and some notions of
econometrics).
Teaching method :
The lectures will be complemented by class room games on individual interactions (experimental economics).
Study load :
24 hours + 6 hours tutorial. The course will take place every Friday from 10.30 am to 12.30 pm (Fall 2004),
Amphi V.
Assessment method :
Written examination 2 hours
Course materials :
The case book for this course is :
SHAPIRO, C. & VARIAN, H., (1998), Information Rules : A Strategic Guide to the Network Economy, ed.
Harvard Business School Press.
1
Supplemental reading :
1. Productivity in the Service Sector
W. J. Baumol, S. A. Batey Blackman & E. N. Wolff, "Unbalanced Growth Revisited: Asymptotic Stagnancy
and New Evidence," American Ecoonomic Review 75: 806-817 (September 1985)
New Economy," (2000). Available at: http://www.internetpolicy.org/briefing/1_00.html
Brynjolfsson, E. Various papers on productivity paradox, esp. "The Intangible Costs and Benefits of
Computer Investments: Evidence from the Financial Markets." Available at http://ccs.mit.edu/erik/
Gordon, Robert. Various papers on productivity paradox at http://www.econ.northwestern.edu/facultyframe.html
2. The specificities of information goods
Arrow, Kenneth Joseph. Elements of the Economics of Information; Information and Increasing Returns.
Nankang, Taipei, Taiwan: Institute of Economics, Academia Sinicia [1996].
F. Machlup, The Production and Distribution of Knowledge in the United States (Princeton, 1962, 1972),
Chapters 1,2,6.
Varian, H. "Markets for Information Goods", http://www.sims.berkeley.edu/~hal/Papers/japan/index.html
3. Property rights in information
E. Novos & M. Waldman, "The Effects of Increased Copyright Protection: An Analytic Approach," Journal
of Political Ecoomy. 92: 236 (1984).
R. H. Coase, "The Problem of Social Cost," Jour. of Law and Economics 3: 1 (1960). [A good discussion is
in: "School's Brief: Of bees and lighthouses" The Economist (Feb. 23, 1991), pp. 72-73.]
Hal R. Varian ``Markets for Public Goods?'' Critical Review, 7(4): 539--557 (1994). [This is a rejoinder to
Coase's lighthouse paper]
J. Farrell & M. Katz, "The Effects of Antitrust and Intellectual Property Law on Compatibility and
Innovation," Antitrust Bulletin 43:609-650 (1998).
4-5-6. Pricing information products and services
Y. M. Braunstein, "An Economic Rationale for Page and Submission Charges by Academic Journals", Jour.
Amer. Soc. Inf. Sci. 28(6):355-358 (1977); reprinted in KEY PAPERS.
Yannis Bakos & E. Bryjolfsson, Bundling papers, available at http://ccs.mit.edu/erik
Hal
R.
Varian,
"Versioning
Information
Goods",
available
at:
http://www.sims.berkeley.edu/~hal/Papers/version.pdf
7. Auctions and contests
Klemperer, Paul, (2004), Auctions : Theories and Practices, Princeton University Press, 256p.
Hirshleifer, J. & Riley, J., (1978), Elements of the theory of auctions and contests, available at
http://www.econ.ucla.edu/workingpapers/wp118.pdf
8-9a. Network Issues I: Externalities and Access
Nicholas Economides, "The Economics of Networks," available at:
http://www.stern.nyu.edu/networks/top.html
S.J. Liebowitz & Stephen E. Margolis (1994) "Network Externality: An Uncommon Tragedy," Journal of
Economic Perspectives, 133-150.
S.J. Liebowitz & Stephen E. Margolis (1995) "Are Network Externalities a New Source of Market Failure?"
Research in Law and Economics. Available at: http://wwwpub.utdallas.edu/~liebowit/netwextn.html
Luis Cabral, David Salant & Glenn Woroch, "Monopoly Pricing with Network Externalities," International
Journal of Industrial Organization (1997).
8-9b. Network Issues II: Battles of Technical Standards
S. Besen & J. Farrell, "Choosing How to Compete: Strategies and Tactics in Standardization," Jour. of
Econ. Perspectives 8(2):117-131 (1994)
Yale Braunstein and Larry White (1985) "Setting technical compatibility standards: and economic analysis,"
The Antitrust Bulletin, 30, 337-355.
Paul A. David, "Clio and the Economics of QWERTY," AEA Papers and Proceedings May 1985, 332-337.
2
S.J. Liebowitz & Stephen E. Margolis (1995) "Path Dependence, Lock-In and History," Journal of Law,
Economics and Organization 11. 205-226.
Background stories :
Cusmano, Michael A., and Yoffie, David B. (1998), Competing on Internet Time: Lessons from Netscape
and its Battle with Microsoft, Touchstone/Simon & Schuster, New York.
Liebowitz, Stanley J., and Margolis, Stephen E. (1999), Winners, Losers & Microsoft: Competition and
Antitrust in High Technology, Independent Institute.
Glynn S. Lunney (1990) "Atari Games v Nintendo: Does a closed system violate the antitrust laws?" High
Technology Law Journal, 29-70.
10. Lock-in and Network Externalities
Arthur, W. Brian (1989), "Competing Technologies, Increasing Returns, and Lock-In by Historical Events",
Economic Journal, Vol. 99, pp. 116-131.
Liebowitz, Stanley J., and Margolis, Stephen E. (1994), "Network Externality: An Uncommon Tragedy",
Journal of Economic Perspectives, Vol. 8, pp. 133-150.
11. The Internet and Electronic Commerce
Whiteley, David (2000): E-Commerce: Strategy, Technologies and Applications, McGraw-Hill. Consult the
book's website.
Further materials and links
http://www.stern.nvu.edu/networks/top.html
http://pub.utdallas.edu/~liebowit/netwextn.html
http://www.sims.berkeley.edu/resources/infoecon/
Course content :
The course will be illustrated through extensive use of case studies and reference to recent research papers on the
topic.
Lecturer
B. DUMONT
B. DUMONT
B. DUMONT
E. MALIN
B. DUMONT
E. MALIN
T. PENARD
L. DENANTBOEMONT/D.
MASCLET
Topic covered
1 – Introduction to the “information
rules” (measuring the information
economy, etc…)
2 – The specificities of information
goods
3 – Information goods and IPRs
4-5-6 - Differentiation and pricing
7 – Auctions and contests
8-9 – Compatibility and standards
11 – The economics of Internet
12 – Tutorial
Study load Date
2H
17/09
4H
24/09, 1/10
2H
6H
2H
6H
2H
6H
8/10
15/10-22/10
29/10
5/11-12/11-19/11-26/11
3/12
in Nov./Dec.
(to be determinated)
3