This is an archived course. A more recent version may be available at ocw.mit.edu.

Calendar

Readings Key

[PRN] = Industrial Organization: Contemporary Theory and Practice by Pepall, Richards and Norman (South-Western College, 1999).
[SV] = Information Rules by Shapiro and Varian (Harvard Business School, 1999).
[H] = Principles of Internet Marketing by Hanson (South-Western College, 2000).

Topic # # of Lectures Topics Readings
I. One

Introduction
  • Hanson, Ward A. Principles of Internet Marketing (H). Ch. 1.
  • Mazlish, Bruce. Preface to The Railroad and the Space Program An Exploration in Historical Analogy. Pp. vii-xv.
II. Seven

Background Concepts

  
II.A  

Monopoly Pricing and Price Discrimination
  • Pepall, Lynne, Daniel Jay Richards, and George Norman. Industrial Organization (PRN). Sections 3.1, 3.2, 4.1.
  • H Chapter 2.
  • Shapiro, Carl, and Hal R. Varian. Information Rules (SV). Chapters 2, 3.
  • Deneckere, Raymond, and Preston McAfee. "Damaged Goods."
II.B  

Competition and Oligopoly Pricing
  • PRN Sections 5.4, 4.2; Chapter 7.
  • SV Chapter 2.
  • Brynjolfsson, Erik, and Michael Smith. "Consumer Decision-making at an Internet Shopbot."
  • Ellison, Glenn, and Sara Fisher Ellison. "Search, Obfuscation and Price Elasticities on the Internet."
II.C  

Market Leadership
  • PRN Section 12.4
  • H Chapter 3.
  • SV Chapters 5, 7.
  • Golder, Peter, and Gerard Tellis. "Pioneer Advantage: Marketing Logic or Marketing Legend."
  • Gort, Michael, and Steven Klepper. "Time Paths in the Diffusion of Product Innovations."
  • Reich, Leonard. "Research, Patents, and the Struggle to Control Radio: A Study of Big Business and the Uses of Industrial Research."
  • Liebowitz, S. J., and Stephen Margolis. "The Fable of the Keys."
II.D  

Regulation
  • Stigler, George J. "The Theory of Economic Regulation."
  • Coase, Ronald. "Payola in Radio and Television Broadcasting."
  • Goolsbee, Austan. "In a World without Borders: The Impact of Taxes on Internet Commerce."
III. Thirteen

 

 E-Industries
III.A  

Auctions
  • Required websurfing: eBay, Yahoo! Auctions, Bidder's Edge.
  • H Chapter 11.
  • Lucking-Reiley, David. "Auctions on the Internet: What's Being Auctioned and How."
  • "Online Auctions in 1999." Stanford Graduate School of Business Case EC-7, pp. 1-5.
  • Resnick, Paul, and Richard Zeckhauser. "Trust Among Strangers in Internet Transactions: Empirical Analysis of eBay's Reputation System."
  • Geurnsey, Lisa. "The Powers Behind the Auctions."
  • Defoe, Daniel. A Tour Through the Whole Island of Great Britain. Pp. 102-107.
  • Roth, Daniel. "Meet eBay's Worst Nightmare."
III.B  

Retail Stores
  • Required websurfing: Amazon, Dell, Pcboost, Z-shops, Yahoo! Shopping, Autobytel, & Wal-mart.
  • PRN Section 9.3.1
  • "Pricing and Branding on the Internet." Stanford Graduate School of Business Case EC-8.
  • "Disintermediation in the U.S. Auto Industry." Stanford Graduate School of Business Case EC-10.
  • Morton, Fiona Scott, Florian Zettelmeyer, and Jorge Silva Risso. "Internet Car Retailing."
III.C  

Online Investing
  • Required websurfing: E-trade, Schwab, Vanguard, ESPN fantasy games.
  • "Broker.com." Stanford Graduate School of Business Case EC-13.
III.D  

Portals and Search Engines
  • Required websurfing: Yahoo!, MSN, AOL, Dealtime, Pricewatch, Orbitz, Travelocity.
  • White, Erin. "No Comparison. Shopping 'bots' were supposed to unleash brutal price wars. Why haven't they."
  • Baye, Michael, and John Morgan. "Price Competition in the Small and in the Large: Evidence from an Internet Price Comparison Site."
  • Clemons, Eric, Il-horn Haan, and Lorin Hitt. "The Nature of Competition among Online Travel Agents: An Empirical Investigation."
  • Fisher, Franklin, and Kevin Neels. "Estimating the Effects of Display Bias in Computer Reservation Systems."
III.E  

B-to-B Ecommerce
  • Lucking-Reiley, David, and Daniel F.Spulber. "Business-to-Business Electronic Commerce."
  • Robinson, Edward. "Battle to the Bitter End."
  • Garicano, Luis, and Steven N. Kaplan. "The Effects of Business-to-Business E-commerce on Transaction Costs."
  • Milgrom, Paul. "An Economist's Vision of the B-to-B Marketplace."
  • Anders, Jason. "Yesterday's Darling: Business-to-Business Sites Replaced Consumer Sites as the Hot Way to Go. Things have gotten considerably cooler."
  • Robinson, Edward. "Battle to the Bitter End (to-End): Ariba and Commerce One are Placing Big Bets on Competing Visions of the B-to-B Economy."
III.F  

Copyrights and Napster
  • Required websurfing: napster, gnuttela.
  • A&M Records and Co-Plaintiffs v. Napster, Inc. Ruling from United States District Court Northern District of California.
  • Napster Inc. v. A&M Records and Co-Plaintiffs-Appellees. United States Court of Appeals Ninth Circuit. Appellant Napster, Inc.'s Opening Brief.
  • Expert Report of Robert E. Hall, witness for Napster, Inc.
III.G  

Akamai and Content Distribution

  
III.H  

Topic TBA

  
IV. Two

Asset Pricing Bubbles
  • H Chapter 13.
  • MacKay, Charles. Extraordinary Popular Delusions and the Madness of Crowds. Chaps. 1-3.
  • Blanchard, Olivier, and Mark Watson. "Bubbles, Rational Expectations and Financial Markets."
  • Garber, Peter M. "Tulipmania."
  • Vanderblue, Homer. "The Florida Land Boom."
  • Posthumus, N. W. "The Tulip Mania in Holland in the Years 1636 and 1637."
V. Two

Macroeconomic Effects
  • Fogel, Robert W. "Railroads as an Analogy to the Space Program."
  • Brynjolfsson, Eric. "The Productivity Paradox of Information Technology: Review and Assessment."
  • Gordon, Robert J. "Does the 'New Economy' Measure up to the Great Inventions of the Past."
  • Autor, David H. "Wiring the Labor Market."