13030 Economics of Information Goods

Credits: 3 graduate credits in Business Administration / Quantitative Methods and Information Systems

Prerequisites: Operations Research, Accounting for Managers, Marketing, Management and Organizational Behavior, Financial Management, Corporate Law for Managers

The course is based on Information Rules, A Strategic Guide to the Network Economy, by C. Shapiro and H.R. Varian (Harvard Business School Press, 1999) and on Selected Topics in Economics of Information Goods, by Nitza Geri (Open University, 2006, in Hebrew), as well as a collection of articles.

The course presents economic models and principles and demonstrates their application within the context of information goods and information systems. It imparts insights and managerial tools for analyzing decisions concerning ways to implement information systems as well as the development, sale or acquisition of information goods and their integration in the activity of the organization.

Topics: Introduction – the information economy; Pricing information; Versioning information; Recognizing lock-in; Managing lock-in; Networks and positive feedback; Cooperation and compatibility; Waging a standards war; Transaction cost economics; Consumption characteristics of information goods – experience economy and attention economy; Approaches to cost/benefit analysis of information systems; Value creation through information products and systems.