Economics of Information and Communications Syllabus - BIM (TU)

Course Objective

This module aims to examine information as an economic commodity and a public good especially in relation to pricing, provision and regulation.

Course Description

Managerial Economics Basic, Markets for Information Goods, The Role of Information in an Economy, Strategies for Pricing Information, Rights Management, Market Strategies: Switching costs and Lock-in, Networks and Positive Feedback, Strategies for Information Industries, Antitrust and Information Policy, Thriving in a new economy, The knowledge-based new Economy, Information and communication Technologies in the Hollywood’s global Primacy

Course Details

Unit 1: Managerial Economics Basic                                                                                           LH 3

• Defining moments of economics: from Industrial revolution to Information revolution
• Technological change in a global economy
• Market failure, Externalities and Public goods

Unit 2: Markets for Information Goods                                                                 LH 4

• Foundations of the Information economy
• Introduction to Information economy
  • Definition of information good
  • The cost of producing information
  • Managing intellectual property
  • Economic and public good
  • The economics of attention
• Technology
  • Systems competition
  • Lock-in and switching costs
  • Positive feedback, network externalities, and standards
• Policy

Unit 3: The Role of Information in an Economy                                                 LH 4

• Transaction costs and Information costs
• The economy of search
• Information problems
  • The moral hazard problem
  • The Adverse-Selection Problem
• Speculation and Risk Bearing
• The Futures Market

Unit 4: Strategies for Pricing Information                                                       LH 6

• Pricing Information Goods
  • Cost of producing information
  • Costs and competition
  • Product Personalization
  • Product pricing
  • Personalized pricing
  • Versioning
  • Group pricing- Price sensitivity, Network effects, Lock-in, Sharing
• Versioning Information
  • Types of versioning
  • Value-subtracted versions
  • Avoiding pitfalls in versioning
  • On-line and off-line versions
  • Goldilocks pricing
  • Customizing the browser
  • Bundling
  • Promotional pricing

Unit 5: Rights Management                                                                              LH 3

• Production and distribution costs
• Lower distribution costs
• Lower reproduction costs
• Trusted systems
• Historical examples - Growing the market
• Choosing terms and conditions

Unit 6: Market Strategies: Switching costs and Lock-in                                       LH 5

• Recognizing Lock-In
  • Examples of lock-in
  • Valuing an installed base of customers
  • Classification of lock-in
  • Suppliers and partners face lock-in, too
  • The lock-in cycle
• Managing Lock-In
  • Lock-in strategy for buyers
  • Lock-in strategy for sellers
  • Investing in an installed base
  • Encouraging customer entrenchment
  • Leveraging your installed base

Unit 7: Networks and Positive Feedback                                                             LH 7

• Positive feedback
• Demand-side economies of scale
• Network externalities
• Collective Switching Costs
• Igniting positive feedback: performance compatibility
• Revolution: offer compelling performance
• Igniting positive feedback: openness control
• Generic strategies in network markets
• Historical examples of positive feedback- Telephone networks and interconnection

Unit 8: Strategies for Information Industries                                               LH 4

• Cooperation and Compatibility
  • How standards change the game
  • Winners and Loser from standards
  • Tactics in formal standard-setting
  • Managing open standards
    • Case Study- Linux Adoption in the Public Sector: An Economic Analysis
  • Waging a Standards War
    • Classification of standards wars
    • Information-age standards wars
    • Key assets in network markets
    • Two basic tactics in standards wars
    • Capstone case: Microsoft Netscape

Unit 9: Antitrust and Information Policy                                                     LH 2

• Policy overview
• Price differentiation
• Competition policy
• Telecommunications regulation and policy in brief (Nepalese context)

Unit 10: Thriving in a new economy                                                             LH 2

• The components of Digital Economics
• Twelve theme of the new economy
• The ten technology shift
• The Internet Economy and its Indicators
• E-commerce and Digital Economy

Unit 11: Information and communication Technologies in the Hollywood’s global Primacy                                                                                                                                                  LH 3

• Hollywood, defined, Hollywood’s economic leadership, Economic analysis of the Hollywood system
• Drivers of Hollywood’s competitive Advantage
• The economic drivers of Hollywood’s global
  • Competitive advantage
  • Factor conditions
  • Relating and supporting industries
  • Strategy, structure and rivalry
  • Demand conditions
  • The potential threats to Hollywood’s global primacy in an evolving landscape

Unit 12: The effects of continual disruption: technological resources supporting resilience in regions of conflict                                                                                                     LH 2

• Technologies to aid resilient behavior
• Research setting
• Technologies resources supporting resilience

Information systems in crisis

• Introduction
• Exploring key information resources
• Fundamental components of an information environment

References

Robert S. Pindyck and Daniel S. Rubinfeld. Microeconomics, 5^th Edition, PHI.(ISBN: 81-203-2336-X )

1. Craig Petersen and W. Cris Lewsi. Managerial economics. (ISBN: 81-203-0963-4)

Carl Shapiro and Hal R. Varian. Information Rules: A Strategic Guide for the Network Economy. Harvard Business School Press, Cambridge, MA, 1998.

Roy J. Ruffin and Paul R. Gregory: Principles of economics. 7^th edition, Addison Wiley Pub, 2000.

Don Tapscott. The digital economy: Promise and peril in the age of networked intelligence. McGraw-Hill. (ISBN : 0-07-063342-8)

Amrit Tiwana. The knowledge Management Toolkit: Practical techniques for building a knowledge Management System. Pearson Education . (ISBN 981-405-873-4)

Efraim Turban, Jae Lee, David King, H. Michael Chung. Electronic Commerce- A managerial Perspective. Pearson Education. (ISBN: 81-7808-362-0)

Niraj K Gupta. The Business of telecommunication- Networking in the New Millennium. Tata McGraw-Hill. (ISBN: 0-07-463497-6)

Pete Moulton. The telecommunications survival guide. Pearson Education. (ISBN: 81-7808-302-7)

Information Technology for development. IT Policy and Strategy papers for Nepal. HMG of Nepal, NPC Secretariat, Kathmandu, Nepal.

An Introduction to the Economics of Information 2nd Edition Oxford –Ines Macho-Stadler and J.David Tiz Castrillo