Textbooks and Readings

Strongly Suggested

[S&V]= Shapiro, Carl, and Hal Varian. Information Rules: A Strategic to the Network Economy. Cambridge, MA: Harvard Business School Press, 1998. ISBN: 9780875848631.

[B&S]= Brynjolfsson, Erik, and Adam Saunders. Wired for Innovation: How Information Technology is Reshaping the Economy. Cambridge, MA: MIT Press, 2009. ISBN: 9780262013666.


Saloner, Garth, and A. Michael Spence. Creating and Capturing Value: Perspectives and Cases on Electronic Commerce. New York, NY: John Wiley & Sons, 2001. ISBN: 9780471410157.

Buy at MIT Press Brynjolfsson, Erik, and Brian Kahin, eds. Understanding the Digital Economy. Cambridge, MA: MIT Press, 2000. ISBN: 9780262024747.

Liebowitz, Stan. Re-Thinking the Network Economy: The True Forces that Drive the Digital Marketplace. New York, NY: American Management Association, 2002. ISBN: 9780814406496.

Varian, Hal, Joe Farrell, and Carl Shapiro. The Economics of Information Technology: An Introduction. Cambridge, UK: Cambridge University Press, 2005. ISBN: 9780521605212.

Sloan Management Review

1 The economics of information


McAfee, Andrew, and Erik Brynjolfsson. "Investing in the IT That Makes a Competitive Difference." Harvard Business Review Magazine, July-August 2008.

———. "Dog Eat Dog: Industries That Buy a Lot of Technology Are Becoming as Cutthroat as Those That Produce Technology." Wall Street Journal (April 28, 2007).


"Technology, Innovation and Productivity in the Information Age." Chapter 1 in [B&S].

"The Information Economy." Chapter 1 in [S&V].

Stiglitz, Joseph E. "The Contributions of the Economics of Information to Twentieth Century Economics." Quarterly Journal of Economics 115, no. 4 (2000): 1441-78.

2 Sermo


Eisenmann, Thomas, and Lars P. C. Nielsen. "Sermo, Inc." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 809142-PDF-ENG, April 10, 2009.

"Networks and Positive Feedback." Chapter 7 in [S&V], pp. 175-225.


Economides, Nicholas. "The Economics of Networks." International Journal of Industrial Organization 16, no. 4 (1996): 673-99.

Leibowitz, Steven, and Steve Margolis. "Network Externalities (Effects)." The New Palgraves Dictionary of Economics and the Law. New York, NY: Macmillan, 1998. ISBN: 9781561592159.

3 Differential pricing, signaling and screening


Varian, Hal. "Buying, Sharing, and Renting Information Goods." The Journal of Industrial Economics 48, no. 4 (2000): 473-88.

Schoder, Detlef, and Alex Talalayevsky. "The Price Isn't Right." Wall Street Journal (August 23, 2010).

Miller, Evan. "Golden Footballs and the Economics of Groupon."

Hamermesh, Daniel. "What Do Books and Roses Say About Discounting?" New York Times, February 23, 2009.

Wertheimer, Linda. "New Pricing Plan Soon to Be for Online Music." National Public Radio, July 27, 2009.


"Pricing Information." Chapter 2 in [S&V].

"Versioning Information." Chapter 3 in [S&V].

Buy at MIT Press Tirole, Jean. The Theory of Industrial Organization. Cambridge, MA: MIT Press, 1988, chapter 3, pp. 133-152. ISBN: 9780262200714.

Shiller, Ben, and Joel Waldfogel. "Music for a Song: An Empirical Look at Uniform Song Pricing and its Alternatives." Working Paper. Philadelphia, PA: Wharton School, University of Pennsylvania, June 17, 2008.

4 Bundling and aggregation


Brandenburger, Adam, and Krishna Vijay. "Bundling." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 9-191-177, April 10, 1995.

Buy at MIT Press Bakos, Yannis, and Erik Brynjolfsson. "Aggregation and Disaggregation of Information Goods: Implications for Bundling, Site Licensing and Micropayment Systems." In Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property. Edited by Hal Varian, and Brian Kahin. Cambridge, MA: MIT Press, 2000. ISBN: 9780262611596.

Albanesius, Chloe. "If Sirius-XM Can Offer A La Carte Programs, Why Can't Cable?" PC Magazine, July 30, 2008.


Bakos, Yannis, and Erik Brynjolfsson. "Bundling and Competition on the Internet." Marketing Science 19, no. 1 (2000): 63-82.

———. "Bundling Information Goods: Pricing, Profits and Efficiency." Management Science 45, no. 12 (1999): 1613-1630.

5 Search and competition


Buy at MIT Press Smith, Bailey, and Erik Brynjolfsson. "Understanding Digital Markets." In Understanding the Digital Economy. Edited by Erik Brynjolfsson, and Brian Kahin. Cambridge, MA: MIT Press, 2000. ISBN: 9780262024747.


Bakos, Yannis. "Reducing Buyer Search Costs: Implications for Electronic Marketplaces." Management Science 43, no. 12 (2000): 1676-1692.

Brynjolfsson, Erik, and Michael D. Smith. "Frictionless Commerce? A Comparison of Internet and Conventional Retailers." Management Science 46, no. 4 (2000): 563-585.

6 Two-sided networks and platform competition


Edelman, Benjamin, and Ian I. Larkin. "eBay Partner Network (A)." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 910008, August 11, 2010.


Arthur, W. Brian. "Increasing Returns and the Two Worlds of Business." Harvard Business Review Magazine, July-August 1996.

7 Pricing at zero


Anderson, Chris. "Free! Why $0.00 Is the Future of Business." Wired Magazine, February 25, 2008.

Parker, Geoffrey, and Marshall W. Van Alstyne. "Two-Sided Network Effects: A Theory of Information Product Design." Management Science 51, no. 10 (2005): 1494-1504.

Gladwell, Malcolm. "Priced to Sell: Is Free the Future?" The New Yorker, July 6, 2009.

Pulley, Brett, and Andy Fixmer. "Diller Calls Free Web Content a 'Myth, Joins Refrain." Bloomberg News, July 24, 2009.

Rich, Motoko. "With Kindle, the Best Sellers Don't Need to Sell." New York Times, January 22, 2010.


Eisenmann, Thomas, Geoffrey Parker, and Marshall W. Van Alstyne. "Strategies for Two-Sided Markets." Harvard Business Review Magazine, October 2006.

Chapters 5 and 6 in [S&V].

Chapters 2 and 7 in [B&S].

8 Amazon


Siegel, Micah, and Fred Gibbons. "Amazon Enters the Cloud Computing Business." Stanford University School of Engineering Case. Palo Alto, CA: Stanford University. Case: 2008-353-1, May 20, 2008.


Stone, Brad. "Can Amazon be the Wal-Mart of the Web?" New York Times, September 20, 2009.

Wilke, Jeff. "Geeking Out at Amazon." Technology Review, November-December 2007.

9 Targeted advertising: Google


Edelman, Benjamin, and Thomas Eisenmann. "Google Inc." Harvard Business School Case. Boston, MA: Harvard Business School Publishing. Case: 910036-PDFENG, January 28, 2010.

Levy, Steven. "Secret of Googlenomics: Data-Fueled Recipe Brews Profitability." Wired Magazine, May 22, 2009.


Varian, Hal. "The Economics of Internet Search." Anglo Costa lecture. Rome, Italy, February 2007. (This resource may not render correctly in a screen reader.PDF)

10 Measurement, analytics, and experimentation Re-read: Levy, Steven. "Secret of Googlenomics." Wired Magazine, May 22, 2009.
11 The long tail


Anderson, Chris. "The Long Tail." Wired Magazine, October 2004.

Brynjolfsson, Erik, Yu (Jeffrey) Hu, and Michael D. Smith. "Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers," Management Science 49, no. 11 (2003): 1580-1596.


Brynjolfsson, Erik, Yu (Jeffrey) Hu, and Mohammad Rahman. "Battle of the Retail Channels: How Product Selection and Geography Drive Cross-channel Competition." Management Science 55, no. 11 (2009): 1755-1765.

Varian, Hal R. "Reading Between the Lines of Used Book Sales." New York Times, July 28, 2005.

Garrity, Brian. "DMG Bets on 'Long Tail'." Billboard, February 18, 2006.

12 Deep QA and knowledge work


Thompson, Clive. "What is IBM's Watson?" New York Times Magazine, June 16, 2010.

Hayek, F. A. "The Use of Knowledge in Society." American Economic Review 35, no. 4 (1945): 519-530.

13 Midterm exam Review readings and class notes.
14 Wikipedia


Greenstein, Shane, and Michelle Devereux. "Wikipedia in the Spotlight." Kellogg School of Management Case. Chicago, IL: Kellogg School, Northwestern University. Case: 5-306-507, 2006.


Raymond, Eric S. "The Cathedral and the Bazaar." In The Cathedral and the Bazaar. Sebastopol, CA: O'Reilly Media, Inc., 2001. ISBN: 9780596001087.

15 Enterprise 2.0


McAfee, Andrew. "The U.S. Intelligence Community (A)." The MIT Center for Digital Business Case. Cambridge, MA: MIT. Case Study 101, October 2009.


McAfee, Andrew. "Enterprise 2.0." Sloan Management Review 47, no. 3 (2006): 21-28.

Brynjolfsson, Erik, and Andrew McAfee. "Beyond Enterprise 2.0." Sloan Management Review 48, no. 3 (2007): 50-55.

16 Open source and innovation


Raymond, Eric S. "The Magic Cauldron." In The Cathedral and the Bazaar. Sebastopol, CA: O'Reilly Media, Inc., 2001. ISBN: 9780596001087.

Davis, Randall. "The Digital Dilemma." Communications of the ACM 44, no. 2 (2001): 77-83.


Chapter 4 in [S&V].

Chapter 6 in [B&S].

Stallman, Richard. "Why Software Should Not Have Owners." In Free Software, Free Society: Selected Essays of Richard M. Stallman. Boston, MA: Free Software Foundation, 2002. ISBN: 9781441436207.

U. S. Copyright Office. Digital Millennium Copyright Act summary, December 1998. (This resource may not render correctly in a screen reader.PDF)

Besen, Stanley M., and Leo J. Raskind. "An Introduction to the Law and Economics of Intellectual Property." Journal of Economic Perspectives 5, no. 1 (1991): 3-27.

Lessig, Laurence. Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity. New York, NY: Penguin, 2004. ISBN: 9781594200069.

17 Experimentation, replication


Hopkins, Michael S. "The 4 Ways IT is Driving Innovation: An Interview with Erik Brynjolfsson." Sloan Management Review 51, no. 3 (2010): 51-56.

Kohavi, Ron, Roger Longbotham, and Toby Walker. "Online Experiments: Practical Lessons." IEEE Computer 43, no. 9 (2010): 82-85.

Brynjolfsson, Erik, and Michael Schrage. "The New, Faster Face of Innovation: Thanks to Technology, Change Has Never Been So Easy- or So Cheap." Wall Street Journal (August 17, 2009).

18 Digital advantage


Brynjolfsson, Erik, and Lorin M. Hitt. "Beyond Computation: IT, Organizational Transformation and Business Performance." Journal of Economic Perspectives 14, no. 4 (2000): 23-48.


Chapters 3 and 4 in [B&S].

Brynjolfsson, Erik, Andrew McAfee, Michael Sorell, and Feng Zhu. "Scale Without Mass: Business Process Replication and Industry Dynamics." Harvard Business School Technology and Operations Mgt. Unit Research Paper No. 07-016, September 30, 2008.