STM-304

The Mechanisms and Methods of Internet Commerce

Offered Spring Semester, 2002

Overview

Trust and Risk in Internet Commerce, L. Jean Camp

Information Rules, Varian & Shapiro

Open Sources, eds. DiBona, Ockman & Stone

Overview

Understanding the regulatory options in Internet commerce requires understanding the nature of money and basic Internet technologies. Thus the class begins with these topics.

The issues of privacy, consumer protection, and universal service will be discussed only with respect to Internet commerce issues. Each student can select a project to explore at greater depth, and I can offer additional readings for the projects selected.

The beginning of the class will focus on money and the nature of the Internet. This will include a day or so of slides which offer the typical overview of Internet commerce as it expands. We will then examine particular systems, ever so briefly. We will move on to discuss the concept of information economics as framed by Varian & Shapiro. Finally we will select essays from Open Sources to discuss the various forms of licenses and how these interact with trust and information rules. The final section of the class will be on examining how different licenses embody different strategies, and the projects will be related to this topic. We will include several case studies, as information commerce has illustratively risen and fallen in the past few years. In particular we will consider Red Hat and First Virtual.

Objectives of the course are:

• to understand trust on the Internet
• to understand how Internet commerce differs from traditional consumer instruments;
• to understand information economics at a simple theoretical level
• to understand different perspectives on policy issues on Internet commerce
• to be able to select decision variables for evaluation of commerce protocols
• to be able to evaluate the different mechanisms for marketing as embodied in different information licenses

Assignments & Grading

1. Class participation, 10%

Virtual and physical.

2. Quizzes, 25%

There will be two tests in this class, each taking not more than one half of the lecture period. There is no midterm.

The project will be graded on content, sources, and quality of argument.

Required texts

Information Rules , Shapiro, Carl. & Varian, Hal, , Harvard Business School Press, (Boston, MA) , c1999, also available as an e-book National Academy of Science, The Digital Dilemma: Intellectual Property in the Information Age. National Academy Press, Washington, DC (2000); available on-line

Dibona, Stone, & Ockman (editors),Open Sources: Voices from the Open Source Revolution, O'Reilly, Cambridge, MA (1999)

Trust and Risk in Internet Commerce, L. Jean Camp, MIT Press, Cambridge, MA (2000); available on-line