Innovation and the Digital Economy

Recommended Prerequisites

Not applicable.

Teaching Methods

The lectures are organized to encourage students’ active involvement in learning, fostering student-teacher and student-student interaction.
In the theoretical classes, contents and models are presented, stimulating the students' intuition and discussion. In others classes, theoretical knowledge is applied to discuss and analyse (real and/or simulated) problems and case studies, hence contributing to the course objectives’ achievement.
Tutorial guidance is also available to students, in order to seek clarification, explanations, guidance for the essay or to debate a specific theme.

Learning Outcomes

The course aims at developing a rigorous economic analysis of a large set of issues surrounding R&D investment, intellectual property and innovation. It also aims at analysing the main economic characteristics of digital markets and firms' strategies in these markets. In these fields, the industrial organization approach appears as fundamental as it focuses on markets, incentives and strategic interaction.
At the end of the course, the student should be able to:
i) Assess and critique public policy alternatives in relation to innovation.
ii) Understand the specifics of new business models emerging in digital industries and markets.

Work Placement(s)

No

Syllabus

Part I – Economics of Innovation
1.1 Foundations and state of the art of innovation
1.2 Market structure and the incentive to innovate
1.3 Patents and patent policy
Part II – Economics of Digital
2.1 The digital economy
2.2 Fundamentals of digital economics: Network effects; Multi-sided markets
2.3 Business strategies in digital markets: Price discrimination; Targeted advertising; Product personalization
2.4 Specific markets: Media; Advertising; E-commerce; The sharing and gig economy

Assessment Methods

Assessment
Synthesis work: 40.0%
Mini Tests: 60.0%

Bibliography

– MCKENZIE. Richard B. – Digital Economics: How Information Technology Has Transformed Business Thinking. Westport, Conn.:
Praeger, 2003.
– VARIAN, Hal; FARRELL, Joseph; SHAPIRO, Carl — The Economics of Information Technology: An Introduction. Cambridge: Cambridge University Press, 2005.
BELLEFLAMME, Paul; PEITZ, Marin – Industrial Organization: Markets and Strategies, 2nd ed. Cambridge University Press, 2015 (Chs. 18 - 21).
PEPALL, Lynne ; RICHARDS, Daniel J. ; NORMAN, George — Contemporary Industrial Organization: A Quantitative Approach.
Hoboken: John Wiley & Sons, 2010 (Chs. 15 - 17).
PEPALL, Lynne ; RICHARDS, Daniel J. ; NORMAN, George — Industrial Organization: Contemporary Theory and Empirical Applications, 5th ed. Hoboken: John Wiley & Sons, 2014 (Chs. 20 - 22).
Articles and excerpts from additional books will be assigned throughout the course for critical analysis and discussion and will be available on the class website.