I have another blog-beg to ask. Later this year I’m planning to teach a university course about Internet economics. I’ve taught it in the past, but I think it’s time to review and refresh the content, since things change quickly in Internet land.

The class is a second-year undergraduate course, so we can only assume prior knowledge of first-year micro and macro. Students are not required to be very good at maths (algebra and graphs are ok, calculus is not ok). There are lectures for 3 hours a week for 12 weeks. Below is a brief overview of the topics I’m planning to cover. Click here (pdf) to see the full gory details of what each topic will cover. I’d really appreciate any feedback.

Internet economics course syllabus:

Introduction (1 week): Overview of internet markets and economic issues.

Network effects, standards and platforms (3 weeks): Demand for goods with network effects and economics of network markets. Standards as networks and standard wars. Two-sided platform demand and competition.

Intellectual property (2 weeks): IP rights as incentives to create information goods. Optimal licensing. Evolution of the music industry. Alternative revenue models for the music industry (selling complements, donations, etc).

E-commerce and selling information goods (4 weeks): Entry and competition in online vs offline markets. Long tail economics. Business strategies like product differentiation, price discrimination, bundling, versioning, selling vs renting, and effects of piracy and DRM.

Online auctions (1 week): Features of online auctions (eBay & Google Adwords). Simple auction forms and optimal bidding strategies. Winner’s curse. Auction design issues (reserve prices, revenue vs efficiency etc). Empirical work on online auctions.

Asymmetric information, trust and reputation (1 week): The lemons problem and solutions. Economic effects of reputation systems. Encryption and markets for trust (certification authorities).

Please leave any suggestions in a comment, or email me. Thanks!