ESOC 316: Digital Commerce

This course will look at how commerce in information content (websites, books, databases, music, movies, software, etc.) functions. We will discuss things like switching costs, net neutrality, the long tail, differential pricing, and complementary goods. We will address the following sorts of questions:

  • Why do so many information producers give away content (such as "apps" for mobile phones) for free? How do companies (such as Google and Facebook) stay in business when no one has to pay to use their services?
  • What are contemporary practices with regard to (Regarding) purchasing access to information content? For instance, why do we tend to buy books, but only rent movies? Also, how do new modes of content provision (such as Pandora and Spotify) change the way that creators get paid for their work?
  • Why are there restrictions on how information content can be used? For instance, why can you play the DVD that you bought on your trip to Europe on the DVD player that you bought at home in the United States?

But why should anybody other than an economist care about the answers to these sorts of questions?

The world now runs on the production, dissemination, and consumption of information. All of us constantly access all sorts of information, through all sorts of devices, from all sorts of providers. We read and interact with websites, we query databases, and we communicate with each other via social media. These sorts of activities permeate both our personal and professional lives. In order to (To) successfully navigate this digital world, information consumers, information producers, and information policy makers need to understand what sorts of information goods are likely to be available and how much they are likely to cost.

We cannot learn enough about digital commerce simply by studying the various information technologies that are now available to create and disseminate information content. What matters most is how people choose to spend their time using these technologies, and what sorts of content can provide earning potential for its creators. What also matters are the unique properties of information content that make it very different from other sorts of goods. For instance, while only one person at a time can drive a particular car or eat a particular hamburger, millions of people can simultaneously read the same book, listen to the same song, and use the same software. These are issues that are part and parcel to living, working, purchasing, and being entertained in an eSociety; these are the issues addressed in this course.

Course Credits
3