Course Instructors: Erik Brynjolfsson, http://ebusiness.mit.edu/erik/
Email: erikb @mit.edu
Class Time & Place: Wednesdays, 2:30-5:30 in E51-385
(1) Course Packet from Graphic Arts, E52-045.
(2) Shapiro & Varian - Information Rules, HBS press
(3) Brynjolfsson & Kahin – Understanding the Digital Economy, MIT Press
(4) Supplemental handouts will be distributed in class.
Grades will be assigned on the following basis:
|
Class participation |
40% |
|
Two page papers on readings (5) |
20% |
|
One Survey or Research Paper |
40% |
Business organizations and markets use a bewildering variety of structures to coordinate the productive activities of their stakeholders. Dramatic changes in information technology and the nature of economic competition are forcing firms to come up with new ways of organizing work. This course uses economic theory to investigate the roles of information and technology in the existing diversity of organizations and markets and in enabling the creating of new organizational forms.
The class is designed for Ph.D students in management, information technology, organizational behavior, industrial relations, economics, and related disciplines. For non-economists, this class offers an exposure to fundamental ideas in the economics of information, organizations, and markets. For economists, this class offers the opportunity to apply abstract economic ideas to the question of how the rise of information technology and related changes in the business environment affect organizations and markets. The applied nature of the class may also be appealing to MBA students willing to undertake the extensive reading assignments and class preparation required in a seminar class of this type.
A seminar class works because students come prepared to engage in thoughtful discussions of the material. Students are therefore asked to write informal, two page memos prior to most classes. These memos will generally be responses to some questions or issues we pose prior to each class. Our purpose in assigning these memos is to help students reflect on important aspects raised in the assigned readings. In addition, each student will be asked to lead part of the class discussion. This will typically involve meeting with the instructor ahead of time to discuss objectives and discussion plans.
There are no exams in this class but a final paper is due at the end of the semester. It can be either a survey of the research in a particular area or a research paper on a specific topic. Either way, the paper can be thought of as a step towards developing a research program. In the past, some of these papers have led to publications. Further details of the paper will be provided in class.
Date Topic
|
2/7 |
Introduction: IT, Markets, and Organizations |
|
2/14 |
Search and Competition I (2 page analysis due) |
|
2/21 |
Search and Competition II |
|
2/28 |
IT and Work Organization (2 page analysis due) |
|
3/7 |
Pricing Information I: Versioning and Bundling |
|
3/14 |
Pricing Information II: Aggregation, Advertising and Targeting (2 page analysis due) |
|
3/21 |
Spring Break (paper proposal due) |
|
3/28 |
Spring Break |
|
4/4 |
The Future of the Information Economy (2 page analysis due) |
|
4/11 |
Knowledge Work: Implications for Organizational Change and
Measurement |
|
4/18 |
IT, Productivity and International Convergence (2 page analysis due) |
|
4/25 |
Inter-Organizational Information Systems, Value-Adding Partnerships and Firm Boundaries |
|
5/2 |
Auctions and Recommender Systems (draft paper due for circulation) |
|
5/9 |
Student Presentations |
|
5/16 |
Student Presentations |
|
5/18 |
Final paper due |
Feb 7. Introduction: IT, Markets and Organizations
Recommended:
15.575 Course Syllabus
Varian. "How to Build an Economic Model in your Spare Time"
Hanson. Chapter 2 "Digital World"
Hitt. "Switching Cost and Brand Loyalty in Electronic Markets: Evidence From On-line Retail Brokers"
Guest:
Lorin Hitt
Think about:
Session to lead
Suggestions for topics or readings to add
Feb14. Search and Competition I
Required:
Stanford GSB EC-8. "Pricing and Branding on the Internet"
Hanson. "Chapter 11: Pricing in an Online World"
Moukas, Guttman, Zacharia and Maes. "Agent-mediated Electronic Commerce: An MIT Media Laboratory Perspective"
Smith, Bailey and Brynjolfsson. "Understanding Digital Markets"
Brynjolfsson and Smith. "The Great Equalizer"
White. "No Comparison"
Pepall, Richards and Norman. "5.4 Price Competition"
Feb 21. Search and Competition II
Required:
Bakos. "Reducing Buyer Search Costs"
Lynch and Ariely. "Wine Online: Search Costs and Competition on Price, Quality, and Distribution"
Goolsbee. "Competition in the Computer Industry: Online vs. Retail"
De Figueredo. "Using Strategic Tools to Generate Profits in e-Commerce"
Pepall, Richards and Norman. "Chapter 3.1-3.2: Miss Daisy and Her Antique Cars"
Pepall, Richards and Norman. "Chapter 4.1-4.2: Product Variety and Price Discrimination"
Feb 28. IT and Work Organization
Required:
Levy: “Working H2H”
Autor. "Wiring the Labor Market"
Bresnahan, Brynjolfsson and Hitt. "Information, Technology, Workplace Organization and the Demand for Skilled Labor: Firm Level Evidence"
Autor,
Katz & Krueger". "Computing Inequality: Have Computers Changed
the Labor Market?"
SeeIT NSF Proposal
Cairncross. "E-Management Survey: Inside the Machine"
Guest:
Frank Levy
Mar 7. Pricing Information I: Versioning and Price Discrimination
Required:
Shapiro and Varian. "Chapter 2: Pricing Information"
Shapiro and Varian. "Chapter 3: Versioning Information"
Bakos and Brynjolfsson. "Bundling Information Goods"
Lyman and Varian “How Much Information?” Executive summary http://www.sims.berkeley.edu/how-much-info/summary.html
Virtual
Guest: Hal Varian
Mar 14. Pricing Information II: Advertising, Attention and Aggregation
Required:
Spence and Owen “Television Programming, Monopolistic Competition and Welfare”
Parker and van Alstyne “Information Complements, Substitutes, and Strategic Product Design”
Bakos and Brynjolfsson. "Aggregating and Disaggregating Information Goods"
Nalebuff, B. R. (1999). Bundling & Barriers to Entry Yale Econ (Working Paper).
Mar 21 and Mar 28. Spring Break
Apr 4. The Future of the Information Economy
Goldhaber “The Attention Economy” FirstMonday http://www.firstmonday.dk/issues/issue2_4/goldhaber/
Napster's Musical History The Standard http://www.thestandard.com/article/display/0,1151,22139,00.html
Besen and Raskind. (1991). An Introduction to the Law and Economics of Intellectual Property. Journal of Economic Perspectives, Vol. 5 (No. 1), pp.3-27.
Orlikowski, Wanda J. "Learning from Notes: Organizational Issues in Groupware Implementation". CSCW `92 Proceedings, November 1992
Hayek, F. A. (1945). The Use of Knowledge in Society. American Economic Review, 35(4), 3-17.
Open source reading TBA
APR 11. Knowledge Work: Implications for Organizational Structure and Measurement
Drucker “The Coming of the New Organization” Harvard Business Review, 1990
Galbraith, J. R. (1974). Organizational Design: An Information Processing View. Interfaces, 4(3), 28-36.
M. Jensen and Meckling, W. (1992). Knowledge, Control and Organizational Structure Parts I and II. In Contract Economics, Lars, Werin, & Hijkander (Ed.), (pp.251-274). Cambridge, MA: Basil Blackwell.
Brynjolfsson,
E. Information Assets, Technology, and Organization, Management Science 40, 12
(1994).
Mendelson and Ziegler “Survival of the Smartest” Appendix and selected portions.
March,
J. (1991). Exploration and Exploitation in Organizational Learning.
Organizational Science 2(1).
Milgrom and Roberts. (1990). The Economics of Modern Manufacturing: Technology, Strategy, and Organization. American Economic Review, Vol. 80 (No. 3).
Van Alstyne, Brynjolfsson & Madnick, “Why Not One Big Database? Principles for Data Ownership” Decision Support Systems Journal. (Dec. 1995)
APR 18. IT, Productivity and International Convergence
Required:
Oliner and Sichel. "The Resurgence of Growth in the Late 1990s: Is IT the story?"
Brynjolfsson and Hitt. "Beyond Computation: IT, Organizational Transformation and Business Performance"
Gordon. "Does the 'New Economy' Measure up to the Great Inventions of the Past?"
Dewan and Kraemer “International Dimensions of the Productivity Paradox” Communications of the ACM, Aug. 1999. Volume 41, No. 8
Brynjolfsson, E., Hitt, L., and Yang, S. Intangible Assets: How the Interaction of Information Technology and Organizational Structure Affects Stock Market Valuations,
Additional readings, TBA
APR
25. Inter-Organizational Information Systems, Value-Adding Partnerships and
Firm Boundaries
Johnston and Lawrence. (1988). Beyond Vertical Integration - the Rise of the Value-Adding Partnership. Harvard Business Review, (July-August), pp. 94-101.
Tapscott, Ticoll and Lowy “Digital Capital” (selected portions)
Green and Porter “Noncooperative Collusion under Imperfect Price Information” Econometrica, Vol. 52, No. 1. (Jan., 1984), pp. 87-100
Milgrom and Roberts, Economics, Organization and Management, Prentice-Hall, 1992 ch. 16, "The Boundaries and Structure of the Firm".
Gibbons. Game Theory for Applied Economists, Princeton New Jersey: Princeton University Press., 1992 p.88-99, p.107-112.
Additional
readings, TBA
MAY 2. Auctions and Recommender Systems
Required:
Lucking-Reiley. "Auctions on the Internet: What's being Auctioned and How?"
Stanford GSB EC-7 "Online Auctions in 1999"
Resnick and Zeckhauser. "Trust Among Strangers in Internet Transactions: Empirical Analysis of eBay's Reputation System"
Resnick and Zeckhauser “Recommender Systems” American Economic Review, 1999.
Additional
readings, TBA
MAY
9. Student Presentations
MAY 16. Student Presentations
STUDENT INFORMATION SHEET
Name____________________________________________________________________
Email Address:_____________________________________________________________
Term Address:_____________________________________________________________
Home Phone:__________________________ Office Phone (if any):_________________
School/Dept. ____________________________ (Sloan, Comp. Science, STS ..)
Program (Ph.D, Masters, Fellows)______________Year (1st, 2nd...) _________
List the courses in organization theory, information systems, economics, and/or human resources that you have taken at MIT or elsewhere.
List any relevant work experience you have had.
What are your goals for this course?