Internet Economics and Digital Business
A.Y. 2019/2020
Learning objectives
The main goal of this course is to build on and extend Industrial Organization theories to develop an understanding of the economics of information technology, digital markets and internet businesses. Specifically, with the growing impact of the Internet on marketplaces, students will be challenged in understanding to what extent classical microeconomic theories still hold. The course will be also focused on the impact of widespread information on monopolist choices and consumer surplus, thus turning into new government policies.
Expected learning outcomes
Participants in this course will learn how the set the prices of a company competing in old- and new-economy sectors, to choose profitably whether or not to collaborate with competitors, to understand when and if a monopolist is better off by subsidizing a market side, and eventually how to suggest the national government whether or not to intervene in order to stimulate competition and reduce incumbents' power over new entrants.
Lesson period: First trimester
Assessment methods: Esame
Assessment result: voto verbalizzato in trentesimi
Single course
This course cannot be attended as a single course. Please check our list of single courses to find the ones available for enrolment.
Course syllabus and organization
Single session
Lesson period
First trimester
Course syllabus
MODULE 1: Industrial organization
1. Course Introduction. Basic Micreoeconomics: Demand and costs. Profit maximization and efficiency. Monopoly and perfect competition.
2. Games and Strategy. Dominant and dominated strategies
3. Oligopoly competition. The Bertrand and the Cournot models. The Stackelberg model (leader - follower).
4. Collusion.
5. Price and non-price discrimination. Non linear prices.
6. Versioning, bundling and other strategies of consumer sorting.
7. Vertical relations; double marginalization.
8. Market Structure and Marker power.
10. Product differentiation; horizontal and vertical differentiation.
11. Product positioning, brand loyalty and switching costs.
12. Research and Development; market structure and incentives for R&D; the dynamics of R&D competition.
13. Strategic behavior, entry and exit.
MODULE 2: High tech and digital markets
1. Markets with network effects. Critical mass. Compatibility. Dynamics of technology adoption. How to win a standards war.
2. Two-sided networks.
3. Frictionless economy.
1. Course Introduction. Basic Micreoeconomics: Demand and costs. Profit maximization and efficiency. Monopoly and perfect competition.
2. Games and Strategy. Dominant and dominated strategies
3. Oligopoly competition. The Bertrand and the Cournot models. The Stackelberg model (leader - follower).
4. Collusion.
5. Price and non-price discrimination. Non linear prices.
6. Versioning, bundling and other strategies of consumer sorting.
7. Vertical relations; double marginalization.
8. Market Structure and Marker power.
10. Product differentiation; horizontal and vertical differentiation.
11. Product positioning, brand loyalty and switching costs.
12. Research and Development; market structure and incentives for R&D; the dynamics of R&D competition.
13. Strategic behavior, entry and exit.
MODULE 2: High tech and digital markets
1. Markets with network effects. Critical mass. Compatibility. Dynamics of technology adoption. How to win a standards war.
2. Two-sided networks.
3. Frictionless economy.
Prerequisites for admission
This course requires a basic understanding of microeconomics
Teaching methods
The course is basically verification of the Microeconomy laws and theories given the huge amount of information available on the Internet with the new century for both companies and consumers.
The course is logically divided into two modules.
Module 1 is devoted to review different kinds of market structures (perfect competition, imperfect competition, monopoly, oligopoly, and so forth) and to present different scenarios in which firms strive to acquire and use market power for their strategic advantage.
The module will emphasize market structure analysis and the strategic behaviors of competing firms, including product differentiation, collusion, price and non-price discrimination, vertical integration, research and development, Industrial Organization, market strategies and the government's role as a regulator affecting structure of markets and behaviour of firms.
With Module 2 Students should be able to apply principles to real-life cases and to analyze the effects of information on economic transactions, the effects of networks and technological platforms and the implications of pricing and bundling of information goods
The course is logically divided into two modules.
Module 1 is devoted to review different kinds of market structures (perfect competition, imperfect competition, monopoly, oligopoly, and so forth) and to present different scenarios in which firms strive to acquire and use market power for their strategic advantage.
The module will emphasize market structure analysis and the strategic behaviors of competing firms, including product differentiation, collusion, price and non-price discrimination, vertical integration, research and development, Industrial Organization, market strategies and the government's role as a regulator affecting structure of markets and behaviour of firms.
With Module 2 Students should be able to apply principles to real-life cases and to analyze the effects of information on economic transactions, the effects of networks and technological platforms and the implications of pricing and bundling of information goods
Teaching Resources
[Program's information for both attending and non-attending students]:
Comino S. and Fabio M. Manenti,
Industrial Organization of High Tech Markets.
London: Edward Elgar, 2013.
Comino S. and Fabio M. Manenti,
Industrial Organization of High Tech Markets.
London: Edward Elgar, 2013.
Assessment methods and Criteria
Final exam mark made of (1) one written essay, (2) a technical exercise or a Group Competition (Business Game), (3) an oral exam (optional for attending students, compulsory for non attending students)
SECS-P/01 - ECONOMICS - University credits: 9
Lessons: 60 hours
Professor:
Firrao Francesco Paolo
Shifts:
-
Professor:
Firrao Francesco Paolo