In the last decade, digital technology has radically changed many economic activities. This course aims to offer a broad picture of the several effects of digitization on industries and markets following the recent survey by Goldfarb and Tucker (2019). Accordingly, the course will illustrate
the impact of digitization on multiple dimensions of economic costs (search, transportation, replication, verification); and review some of the theoretical models used by economists to study and design digital marketplaces. At the end of the course, students should be aware of the main
streams in the growing literature about online markets and digital technology.
There are three components to the grade:
1. Individual take-home assignment (40%) at the end of the course;
2. Group-project (3-4 students) (30%) at the end of the course (last class);
3. Presentation + referee report (30%) during the course.
Each student gives a short presentation (15 minutes) during the course and writes a referee report of a paper in a reference list that will be provided in the Instruction document. At the end of the course, a take-home exam is assigned to each student. Then, the class is divided into groups of four students. The groups are given a case study about digital markets, which they have to resolve.
The course lasts 9 weeks and the lectures are on Wednesday from 13.00 to 15.00. Each lecture will be divided into two 50/55-minutes sessions. In each part, some of the required reading papers (***) from the reference list will be covered. The list of papers is not exhaustive, and further reading can be added depending on the class background and interests.
Schedule of topics by week:
- The macro impact of digital technology on transportation costs
- Searching online: lower prices, price dispersion, and product variety
- Matching individuals: the sharing economy and market design
- The rise of online platforms: two-sided markets
- Tracking individuals: price discrimination, ad targeting, and privacy concerns
- Online trust: reputation and feedback systems
- Providing digital products for free: copyright and open source
- Regulating the sharing economy: externalities and discrimination
- The antitrust of digital platforms: GAFAM and beyond
The course follows the approach by: Goldfarb, A. and Tucker, C., 2019. “Digital economics”. Journal of Economic Literature, 57(1), pp.3-43.
The references of the weekly classes will be announced soon.