MG4A8      Half Unit
Strategy for the Information Economy

This information is for the 2018/19 session.

Teacher responsible

Dr Jorn Rothe


This course is available on the CEMS Exchange, Global MSc in Management, Global MSc in Management (CEMS MiM), Global MSc in Management (MBA Exchange), MBA Exchange, MSc in Economics and Management, MSc in Management and Strategy and MSc in Risk and Finance. This course is available with permission as an outside option to students on other programmes where regulations permit.


Basic knowledge of economics.

Course content

The internet has created many new market opportunities. Web-based technology allows for new kinds of market interactions and products. Understanding the design and functioning of these new markets is central for business strategy. This course develops the relevant economic principles and applies them to the formulation of strategies for the provision of information goods and the design of online market platforms.

The first part of the course is concerned with strategic aspects of the provision of information goods (such as music, software, product reviews, search results). Topics include the pricing of information goods, versioning, switching costs, network effects, lock-ins and the discussion of e-commerce institutions and business models. The second part of the course covers the use and design of online-market transaction mechanisms for business-to-consumer and business-to-business e-commerce. Topics include principles of market engineering, design of standard (online-)auction markets and multi-unit auction markets, reputation and collusion in online markets and matching markets. The course provides a theoretical background and relates theory to various examples and case-studies (such as the design of Google's ad-auctions).


10 hours of lectures and 9 hours of seminars in the MT. 2 hours of lectures in the ST.

Students on this course will have a reading week in Week 6, in line with Departmental policy.

Formative coursework

Two exercise sets with a mixture of qualitative and quantitative questions. 

Indicative reading

Hal R. Varian: Intermediate Microeconomics, W.W.Norton, 2014 (selected chapters); Carl Shapiro and Hal R. Varian: Information Rules, HBS Press, 1999 (selected chapters). A detailed reading list will be provided at the beginning of the course.


Exam (100%, duration: 2 hours) in the summer exam period.

Key facts

Department: Management

Total students 2017/18: 44

Average class size 2017/18: 13

Controlled access 2017/18: Yes

Lecture capture used 2017/18: Yes (MT)

Value: Half Unit

Guidelines for interpreting course guide information

Personal development skills

  • Problem solving
  • Commercial awareness
  • Specialist skills