

Economics of Information Technology - bengtan
http://www.sims.berkeley.edu/~hal/Papers/mattioli/mattioli.html

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ilamont
Varian (who is or was Google's chief economist) is also the author of a very
good book, written in the late 1990s, that covers many of the same topics:

Shapiro, Carl and Varian, Hal. Information Rules: A Strategic to the Network
Economy. Harvard Business School Press, 1998.

The book is a classic, and is actually at the top of the reading list in a
current MIT course also called "The Economics of Information":

[http://ebusiness.mit.edu/erik/567%202009%20syllabus-2009-11-...](http://ebusiness.mit.edu/erik/567%202009%20syllabus-2009-11-14.pdf)

There is a class blog here:

<http://www.economicsofinformation.com/>

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bengtan
PDF and html versions available from:

From
[http://people.ischool.berkeley.edu/~hal/people/hal/papers.ht...](http://people.ischool.berkeley.edu/~hal/people/hal/papers.html)

~~~
tomjen3
Unfortunately, I get a 404 on that link (I use hnDroid, this may or may not be
relevant).

Thank you.

~~~
colkassad
Replace "ht..." with "html" in your mobile browser. It's a bug in that reader
app.

EDIT: The bug is also in the Hacker News Reader android app.

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endlessvoid94
This strikes me as odd (from section 5.4):

> "Acquisti and Varian [2001] examine a simple model with two types of
> consumers: high-value and low-value, in which a monopolist can commit to a
> price plan. They find that although a monopolistic seller is able to make
> offers conditional on previous purchase history, it is never profitable for
> it to do so, which is consistent with the earlier analysis of intertemporal
> price discrimination by Stokey [1979] and Salant [1989]."

Isn't this what OS companies do? They charge less for upgrades? According to
this paper, this would "never be profitable".

Am I misunderstanding this?

EDIT: added section number for reference and context

~~~
bhoung
The paper refers to whether a monopolist should set different prices to the
two types of customers (high value or low). They find that the answer is no.
The part that is confusing you (I think), is in the next paragraph, where the
paper then finds that if the monopolist however offers an enhanced service
based on purchasing history, it does become optimal to set two different
prices. Also by "never profitable", they don't mean that the monopolist won't
make any profit, it's just that they won't be able to increase profit.

~~~
endlessvoid94
Gotcha. I didn't realize he meant growth.

Thanks.

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FluidDjango
His page at <http://people.ischool.berkeley.edu/~hal/> says he's retired from
Cal and now at Google.

I've bookmarked his page of academic papers. Unsurprisingly, since his getting
affiliated with Google about 8 years ago, he's written on economics of Search:
[http://people.ischool.berkeley.edu/~hal/people/hal/papers.ht...](http://people.ischool.berkeley.edu/~hal/people/hal/papers.html)
and on the Google Library Project.

Sure wish he (or someone) would be funded to do an update of this (2000 pub
date) study. I wonder what additional variables might need to be factored in
by now.

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bertil
A lot of research has been done since; the most interesting has to be on
“multi-sided platforms”. I'm working on including diffusion on complex network
in there too.

I am actually teaching that class to Masters in CS & Management, and trying to
have proper presentations ready in video format — but I spend too much time on
HN for it to be ready yet.

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tomjen3
Great find, thanks.

