Internet Economics

About

This is a course about the economics of technology, with a particular focus on making economically-informed policy and business strategy decisions in digital markets. It has three main goals.

Firstly, through the methods of economics, students will be equipped with an analytical and conceptual toolset to answer a broad range of questions about technology and society. Students will be equipped to access the economics literature, and will become familiar with economic modelling as a methodological approach.

Secondly, through the substance of economics we will learn about important economic forces that shape the social and technological world in which we live. Economics will help us to explain often puzzling social phenomena that we experience every day, and diagnose when and how markets fail to work well for society.

Thirdly, through the practice of economics, we will consider how economics can be used by decision makers. We’ll see the economic principles that underlie important aspects of strategy in the digital economy. And we’ll learn how economics informs policy in spheres such as regulation, antitrust, intellectual policy, and data and privacy.

Key Themes

• How does technology challenge existing models of economic behaviour and markets? Example: how should firms price digital goods, for which scarcity is not a concern?
• What kinds of features and phenomena are common across online and technology markets and why do these emerge? Example: why are so many online markets dominated by one or two large firms? Can and should we change that?
• What kinds of business models and practices are used by online firms and why? Example: why are so many online services free to use?
• When and how should policy makers intervene in markets? What is the rationale for common forms of statutory or regulatory intervention? Example: why do we issue patents? Why do we subsidise some activities? Why do we sometimes fine firms for “abuse of dominance” or prevent them from merging?
• How should interactions mediated by the Internet be structured? How should markets and online platforms be designed to facilitate good outcomes? Example: how can markets be designed to foster trust between strangers? What kinds of privacy regimes best facilitate communication?

Learning Outcomes

At the end of this course students will have:

• obtained an understanding of important concepts and methodological approaches in economics.
• know how economic analysis can be applied to help understand interaction and exchange in technology markets.
• understand key economic principles underlying policy making and business strategy in the technology context.
• be able to formulate research questions that are amenable to economic analysis and use the tools of economics and game theory to provide answers to them.
• be familiar with important research on the economics of technology.