B20.3345 Research Seminar on Economics of Information Technology

Shinkyu Yang, Assistant Professor, IOMS Dept/IS Group



Work phone:


Office Location:

44 West 4th St, Suite 8-94

Office hours:

Thursday 9 – 10:30 am



Yannis Bakos, Associate Professor, IOMS Dept/IS Group 




Work phone:


Office Location:

44 West 4th St, Suite 8-83

Office hours:


Personal Link:



Class Time & Place: Thursdays, 10:30am-12:00pm, 2:30pm-4pm  in  KMEC 8-191


Most major readings except for the books will be posted on-line in NYU Blackboard (BB) site, in Class Documents from http://classes.nyu.edu. In addition, the following books may help some student who want to get a broader view of the topic. In addition, these books are less technical, more managerial, and more accessible than journal papers we will read in class. Anyone can borrow the books from instructors to read or make a copy of some portions.

List of Helpful Books    

(1) Milgrom and Roberts (MR)(1992) Economics, Organization, and Management, Prentice Hall

(2) Shapiro & Varian (SV)- Information Rules, HBS press

(3) Macho-Stadler and Perez-Castrillo (1999), An Introduction to the Economics of Information: Incentives and Contracts, Oxford University Press

(4) Hart (1995), Firms, Contracts, and Financial Structure, Oxford University Press

(5) Brynjolfsson & Kahin (BK)– Understanding the Digital Economy, MIT Press


Grades will be assigned on the following basis:

·               Class participation 25%
·               5 two page write-ups, and 2 five page write-ups 25%
·               ICIS submission quality paper, Due May 5th          http://icis2003.cbe.wsu.edu/


Business organizations and markets use a bewildering variety of structures to coordinate the productive activities of their stakeholders. Dramatic changes in information technology and the nature of economic competition are forcing firms to come up with new ways of organizing work. This course uses economic theory to investigate the roles of information and technology in the existing diversity of organizations and markets and in enabling the creating of new organizational forms.

The class is designed for Ph.D students in management, information technology, organizational behavior, industrial relations, economics, and related disciplines. For non-economists, this class offers an exposure to fundamental ideas in the economics of information, organizations, and markets. For economists, this class offers the opportunity to apply abstract economic ideas to the question of how the rise of information technology and related changes in the business environment affect organizations and markets. The applied nature of the class may also be appealing to MBA students willing to undertake the extensive reading assignments and class preparation required in a seminar class of this type.

A seminar class works because students come prepared to engage in thoughtful discussions of the material. Students are therefore asked to write informal, two page memos prior to most classes. These memos will generally be responses to some questions or issues we pose prior to each class. Our purpose in assigning these memos is to help students reflect on important aspects raised in the assigned readings. In addition, each student will be asked to lead part of the class discussion. This will typically involve meeting with the instructor(s) ahead of time to discuss objectives and discussion plans.

There are no exams in this class but a final paper is due at the end of the semester. It can be either a survey of the research in a particular area or a research paper on a specific topic. Either way, the paper can be thought of as a step towards developing a research program. We expect most of your papers should achieve at least conference submission quality. Further details of the paper will be provided in class.

We are indebted to Erik Brynjolfsson and Arun Sundararajan, for much of our material is drawn from their courses taught at MIT Sloan School of Management and NYU Stern School of Business.

COURSE OUTLINE (Tentative: Subject to Revision)

Date                                      Topics  


Introduction, Module 1-i, Managerial Theories of the Firm


Module 1-ii , (2 page analysis due), Prof. Roy Radner, about Informational view on the organization


Module 2-i, Principal-Agency Theory and the Firm


Module 2-ii, (2 page analysis due), P-A theory, the firm, and open science institution.


Module 3-I, Contractual Theories of the firm, (paper proposal due)


Module 3-ii, (2 page analysis due)


Module 4-i, Search and Matching Models


Spring Break, no class


Module 4-I, (2 page analysis due)


Module 5, Networks and Standards (2 page analysis due)


Module 6-i, Pricing Models  (draft paper due for circulation)


Module 6-ii,  (2 page analysis due)


Module 7-i:  Measuring Performance and Innovation in the Information Economy  


Module 7-ii:  (2 page analysis due) Final paper due, paper for ICIS 2003 Seatle, December 14-17


Module 7-iii: Conclusion


paper for WISE 2003, Seatle, December 13-14,  IS conference sites