Ben-Gurion University of the Negev School of Management MBA Workshop on Business in the Internet Era

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1 Ben-Gurion University of the Negev School of Management MBA Workshop on Business in the Internet Era Professor Joseph Pelzman Office Hours - Israel - USA Visiting Faculty Office by Appointment jpelzman@bgu.ac.il jpelz@gwu.edu C O U R S E D E S C R I P T I O N : The digital economy is reshaping the way we do business. The issues we intend to address in this workshop include: The Basics: Differences between e-commerce and e-business. The unique features of e-commerce technology and its significance. The major types of e-commerce and its growth. The evolution of e-commerce from its early years to today. The factors that will define the future of e-commerce. Business Models The key components of e-commerce business models, B2C, B2B. Business models in other emerging areas of e-commerce. The key business concepts and strategies applicable to e-commerce. Supply Side Infrastructure The key technology concepts behind the Internet. The current structure of the Internet. The limitations of today s Internet. Security The scope of e-commerce crime and security problems. The key security threats in the e-commerce environment. The role of technology to protect the security of messages sent over the Internet. The importance of policies, procedures, and laws in creating security. The major e-commerce payment mechanisms. The Consumer in the e-commerce Environment

2 Pelzman: Workshop: Business in the Internet Era 2 The key features of the Internet audience. Consumers behave online. The basic marketing concepts needed to understand Internet marketing. The main technologies that support online marketing. Basic e-commerce marketing and branding strategies. Ethical, Social, and Political Issues in E-commerce Why does e-commerce raises ethical, social and political issues? The main ethical, social, and political issues raised by e-commerce. The practices of e-commerce companies that threaten privacy. The various forms of intellectual property and the challenges involved in protecting it. Taxation of e-commerce raises governance and jurisdiction issues. Major public safety and welfare issues raised by e-commerce. Online Retail The environment in which the online retail sector operates today. The economic viability of an online firm. The challenges faced by the different types of online retailers. The major features of the online service sector. The trends taking place in the online financial services industry. The major trends in the online travel services, banking and other industries. Media and Online Content The major trends in the consumption of media and online content. Five basic content revenue models. The key challenges facing content producers and owners. The key factors affecting the online publishing industry. The key factors affecting the online entertainment industry. Social Networks, Auctions, and Portals The difference between a traditional social network and an online social network. The different types of social networks and online communities and their business models. The major types of auctions, their benefits and costs, and how they operate. Recognize the potential for auction abuse and fraud. The major types of Internet portals. G R A D I N G F O R T H E C O U R S E :

3 Pelzman: Workshop: Business in the Internet Era 3 Final exam composed of multiple choice questions and short essays to be given on the afternoon of March 27, 2012 (40%) and a group paper to be submitted via 60 days after the completion of the workshop. Paper topics will be distributed in class. T E X T S : In addition to a list of articles which will placed on line, students are encouraged to read from the following textbooks. Kenneth C. Laudon; Carol Guercio Traver, E-Commerce 2010: Business, Technology, Society, Seventh Edition, Publisher: Prentice Hall, You can purchase this book on Course Smart. I suggest that you purchase the etext. ISBN (Laudon-Traver, 2011) David D. VanHoose E-Commerce Economics. New York: Routledge. ebook ISBN: The reading material by topic is presented below. Students are strongly encouraged to surf the web for interesting tidbits about E-Commerce. Additional readings may be presented as class discussion dictates. TOPICS and READINGS March 21, 2012 The Digital Economy - Markets and Prices Laudon-Traver, (2011), Chs 1-3. Van Hoose, (2011), Chs Ariely, Dan and John G. Lynch Wine Online: Search Costs and Competition on Price, Quality, and Distribution, MIT Center for Digital Business, Working Paper. Brynjolfsson, Erik, Yu (Jeffrey) Hu, Michael D. Smith, Long Tails Versus Superstars: The Effect of IT on Product Variety and Sales Concentration Patterns. September MIT Center for Digital Business, Working Paper. Brynjolfsson, Erik, Yu (Jeffrey) Hu, Michael D. Smith. Long Tails Versus Superstars: The Effect of IT on Product Variety and Sales Concentration Patterns September MIT Center for Digital Business, Working Paper. Brynjolfsson, Erik, Astrid A. Dickyand Michael D. Smith A Nearly Perfect Market? MIT Center for Digital Business, Working Paper. Brynjolfsson, Erik, Astrid Andrea Dick and Michael D. Smith Search and Product Differentiation at an Internet Shopbot, MIT Center for Digital Business, Working Paper..

4 Pelzman: Workshop: Business in the Internet Era 4 Brynjolfsson, Erik, Michael D. Smith and Yu (Jeffrey) Hu Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers, MIT Center for Digital Business, Working Paper. Smith, Michael and Erik Brynjolfsson. Consumer Decision-making at an Internet Shopbot: Brand Still Matters, The Journal of Industrial Economics. XLIV:4. December March 22, 2012 Search, Innovation and Two-Sided Markets. Van Hoose, (2011), Chs Ambrus, A. and Rossella Argenziano, Asymmetric Networks in Two-Sided Markets, American Economic Journal Microeconomics (2009) 1: Brynjolfsson, Erik and Xiaoquan (Michael) Zhang, Innovation Incentives for Information Goods. MIT Sloan School Working Paper (Revised October 2010). Economides, N. and Evangelos Katsamakas, Two-Sided Competition of Proprietary vs. Open Source Technology Platforms and the Implications for the Software Industry, Management Science. (2006) 52: Ellison, Glenn, and Sara Fisher Ellison. Search, Obfuscation and Price Elasticities on the Internet. NBER Working Paper June Gort, Michael, and Steven Klepper. Time Paths in the Diffusion of Product Innovations. The Economic Journal. 92:367. September Liebowitz, S. J., and Stephen Margolis. The Fable of the Keys. Journal of Law and Economics. 33:1, April Roson, Roberto, Two-Sided Markets: A Tentative Survey, Review of Network Economics, (2005), 4: March 25, 2012 Public Policy, the Public Sector and Internet Regulation. Van Hoose, (2011), Chs Brynjolfsson, Erik, Yu (Jeffrey) Hu and Michael D. Smith, Long Tails Versus Superstars: The Effect of IT on Product Variety and Sales Concentration Patterns MIT Center for Digital Business, Working Paper Bulkley, Nathaniel and Marshall Van Alstyne , Social Networks and Performance: An Econometric Case Study, MIT Center for Digital Business, Working Paper. (July 2007.)

5 Pelzman: Workshop: Business in the Internet Era 5 Choi, Jay Pil, "Antitrust Analysis of Tying Arrangements/' in Recent Developments in Antitrust: Theory and Evidence, byjay Pil Choi, Cambridge, MA: MIT Press,2007, pp Datee, Brice and Henry Birdseye Weil, Dynamics of Social Factors in Technological Substitutions, MIT Center for Digital Business, Working Paper. (June 2006.) Evans, David, Antitrust Issues Raised by the Emerging Global Internet Economy, Northwestern University School of Law Review 102(4), Feick, Jurgen, and Raymund Werle, "Regulation of Cyberspace in The Oxford Handbook of Regulation, by Robert Baldwin, Martin Cave and Martin Lodge, Oxford: Oxford University Press, 2010, pp Gilbert, Richard, "Competition Policy for Intellectual Property in Handbook of Antitrust Economics, by Paolo Buccirossi, Cambridge, MA: MIT Press, 2008, pp Varian, Hal, Economic Aspects of Personal Privacy in Internet Policy and Economics: Challenges and Perspectives, second edition, William Lehr and Lorenzo Maria Pupillo, Eds., Heidelberg: Springer, 2009, pp Weiser, Philip J. The Future of Internet Regulation, BEPress. March 26, 2012 E-International Trade, On Line Banking, Digital Money. Van Hoose, (2011), Chs Blum, Bernardo, and Avi Goldfarb, Does the Internet Defy the Law of Gravity? Journal of International Economics 70 (2006), pp Brynjolfsson, Erik, Yu (Jeffrey) Hu and Mohammad S. Rahman, Battle of the Retail Channels: How Product Selection and Geography Drive Cross-channel Competition, June 2009 Clarke, George, Has the Internet Increased Exports for Firms from Low and Middle Income Countries, Information Economics and Policy 20 (2008), Mann, Catherine, and Jacob Kirkegaard, Accelerating the Globalization of America: The Role of Information Technology, Washington, DC: Institute for International Economics, Mann, Catherine, Sue Eckert, and Sarah Cleeland Knight, Global Electronic Commerce, Washington, DC: Institute for International Economics, OECD Information Technology Outlook, Organization for Economic Cooperation and Development, various years.

6 Pelzman: Workshop: Business in the Internet Era 6 Ruffin, Roy, The Nature and Significance of Intra-Industry Trade, Federal Reserve Bank of Dallas Economic and Financial Review, 4th Quarter 1999, pp Simester, Duncan, Yu (Jeffrey) Hu, Erik Brynjolfsson and Eric T. Anderson, Dynamics of Retail Advertising: Evidence from a Field Experiment, Forthcoming in Economic Inquiry. Wunsch-Vincent, Sacha, The WTO, the Internet, and Trade in Digital Products, Oxford: Hart Publishing, March 27, 2012 Auctions, Privacy and Trust. Laudon-Traver, (2011), Ch. 11. Aral, Sinan, Yannis Bakos and Erik Brynjolfsson, How Trust, Incentives and IT Shape Global Supplier Networks: Theory and Evidence from IT Services Procurement, MIT Center for Digital Business, Working Paper. Bertsimas, Dimitris, Georgia Perakis and Jeffrey Hawkins, Optimal Bidding in Online Auctions, MIT Center for Digital Business, Working Paper. (December 200). Camp, L. Jean, Trust and Risk in Internet Commerce, Cambridge, MA: MIT Press, Lucking-Reiley, David. Auctions on the Internet: What's Being Auctioned and How. The Journal of Industrial Economics. 48:3. September Reynolds, Mark C., Marshall Van Alstyne, Sinan Aral, Functions that Preserve Privacy but Permit Analysis of Text, MIT Center for Digital Business, Working Paper