ProfessorSchedule of SessionsClass Information Course Perspective and Description Course norms and expectations Assignments and grading Readings and Class scheduleBooks for the Course Class Schedule (may be modified slightly to accomodate guest speakers)MIT SLOAN SCHOOL OF MANAGEMENT 15.567 THE ECONOMICS OF INFORMATION STRATEGY, STRUCTURE AND PRICING FALL 2006 PROFESSOR Professor: Room: Phone: Email: Web: Erik Brynjolfsson E53-313 617-253-4319 [email protected]://digital.mit.edu/erik Administrative Assistant: Yubettys Baez Room: Phone: Email: E53-316 617-253-2656 [email protected] Teaching Assistant: Adam Saunders Room: Phone: Email: E53-314 (617) 258-5582 [email protected] SCHEDULE OF SESSIONS September October November December Wed 9/06 The Economics of Information Mon 10/02 Information Complements Wed 11/01 MidTerm Exam Mon 12/04 Student Presentations Due: Presentations Mon 9/11 Rhapsody Due: 1 pager Wed 10/04 Encryption, DRM and Authentication Mon 11/06 Wikipedia Due: 1 pager Wed 12/06 Student Presentations Wed 9/13 Differential Pricing Mon 10/09 Holiday Wed 11/08 Free Software Mon 12/11 Student Presentations Mon 9/18 Bundling and Aggregation Wed 10/11 Search and Competition Due: Pricing Ex. Mon 11/13 Enterprise 2.0 Due: 1 pager Wed 12/13 The Information Economy Future Team project due Wed 9/20 NTT DoCoMo Due: 1 pager Mon 10/16 Digital Value Chain Due: Value Chain Wed 11/15 Digital Transformation Mon 9/25 Holiday Wed 10/18 The Long Tail Due: Project Topic Mon 11/20 Google Due: Change Matrix CANCELLED Wed 9/27 Amazon Mon 10/23 SIP week Wed 11/22 Matrix of Change Presentations Wed 10/25 SIP week Mon 11/27 Information Worker Productivity Mon 10/30 Reputation and Superstars Debate Wed 11/29 Intangible Assets Please check the class website before every class for announcements, assignments and schedule changes. MIT Sloan 15.567 The Economics of Information 1MIT Sloan 15.567 The Economics of Information 2 CLASS INFORMATION Class Time: Mon, Wed: 4-5:30 PM, E51-376 Class Web Site: http://sloanspace.mit.edu See also http://digital.mit.edu for the MIT Center for Digital Business Office Hours: Mondays, 5:30-6:30pm and by appointment. COURSE PERSPECTIVE AND DESCRIPTION Information, especially digital information is different in many ways from other goods and services. Yet, information is still subject to the laws of economics. The purpose of this course is to explore some of the economics of information and understand how they affect strategy, structure and pricing. We will use lectures, cases, class discussion, guest speakers, exercises and team projects to examine a variety of topics including the pricing of information goods, bundling and other forms of aggregation, network effects, digital rights management, search and competition, targeted advertising, web 2.0 and enterprise 2.0, knowledge management, the economics of reputation and recommender systems, and a variety of other topics. Fundamental economic principles will be illustrated using business case studies. At times, we will also discuss emerging digital technologies, business methods and industry structures. Rapid and radical changes inevitably create opportunities for great wealth creation – and destruction. Players empowered with knowledge of the underlying economics, business and technological principles will be at an advantage in such an environment. COURSE NORMS AND EXPECTATIONS We have woven a number of cases into the structure of this course, and as such, it is crucial to appreciate that students in the class are co-producers of class discussions and collective learning. For this to happen, class members need to listen carefully to one another and build on or critique prior comments. Discussions need to stay on track, and it is the responsibility of the faculty and students to collectively accomplish this. The discussion should be a conversation in which all participants recognize that they have an obligation to advance our understanding of the issue at hand. Your contributions to this learning process will be appraised in addition to the content of what you contribute. Because this course relies heavily on class participation for its success, class norms and expectations regarding class behavior are very important: 1. Attendance at every class is required. Please schedule other activities at times other than when the Economics of Information meets. Please arrive on time and stay from the beginning of class to the end. If you must miss a class, please advise the Teaching Assistant in advance. You are allowed up to two excused absences before missing class seriously affects your grade. For classes you must miss, it is your responsibility to find out from your classmates what materials were covered, what items were distributed in class, and what key points were collectively advanced. 2. Please come to class prepared to discuss the readings. In every class, we will "cold call" students whose hands are not raised. If something has prevented you from being prepared for class that day, you should let me know before the start of class. 3. Technology allows us to be connected almost anywhere and anytime. However, there are times when it is most productive not to be electronically connected. Class sessions are one such time. During class sessions, please turn off cell phones, beepers, laptops or other such equipment. 4. Please bring your name card to every class and for the first several weeks, please sit in the same seat each class. This will make it easier for me to get to know you and to make sure you get appropriate credit for your contributions.MIT Sloan 15.567 The Economics of Information 3Students who are thoroughly prepared for each session will benefit the most from this class. What’s more, they also add to the learning of their classmates. Hence, if you don’t feel comfortable with these expectations, then this is not a good course for you to take this semester. ASSIGNMENTS AND GRADING This is a 9 unit course (3-0-6 H-level graduate credits). Grades will be assigned on the following basis: Class participation 35% (including debates) Individual Assignments 20% (One pagers, Value Chain, Pricing Exercise and Matrix of Change) Midterm Exam 10% Team project 35% There are seven brief individual assignments in the course: Four One-page Mini Case Analyses, one Value Chain Analysis, one Pricing Exercise and one