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Economics and Law
Lecturers: Dr R.J. Anderson, Mr N.D.F. Bohm and Mr R.N. Clayton
(rja14@cl.cam.ac.uk, nbohm@ernest.net, rnc1@cl.cam.ac.uk)
No. of lectures: 8
`Professional Practice and Ethics' (Part IA) provides a
useful foundation for this course.
This course is a prerequisite for Business Studies (Part II)
and E-commerce (Part II)
Aims
This course aims to give students an introduction to some basic
concepts in economics and law.
Lectures
- Overview of economics. Motivation: the main interactions
between economics and computer science. Macroeconomics and
microeconomics; the roles of theory and statistics. Terminology:
preference, utility, choice and budget.
- Consumer theory. Market equilibrium; Pareto efficiency;
the discriminating monopolist; price discrimination.
- Game theory. The Prisoners' Dilemma; Nash equilibrium;
iterated games; tit-for-tat; hawk-dove; evolution of strategies.
- Asymmetric information. The market for lemons; adverse
selection; moral hazard; signalling; brands; transaction costs; theory
of the firm.
- Auctions. English auctions; Dutch auctions; Vickrey
auctions. The winner's curse. Mechanism design and the combinatorial
auction. Applicability of auction mechanisms in computer science.
- Principles of Law. Contract and tort; copyright and patent;
binding actions; liabilities and remedies; competition law; choice of
law and jurisdiction.
- Law and the Internet. EU directives including distance
selling, electronic commerce, data protection, electronic signatures
and copyright; their UK implementation. UK laws, including RIP.
- Network economics. Real and virtual networks, supply-side
versus demand-side scale economies, Metcalfe's law, the dominant firm
model, the differentiated pricing model. Regulatory and other public
policy issues of information goods and services markets.
Objectives
At the end of the course students should have a basic appreciation of
economic and legal terminology and arguments. They should understand
some of the applications of economic models to systems engineering and
their interest to theoretical computer science. They should also
understand the main constraints that markets and legislation place on
firms dealing in information goods and services.
Recommended books
Shapiro, C. & Varian, H. (1998). Information Rules. Harvard
Business School Press.
Varian, H. (1999). Intermediate Microeconomics - A Modern Approach. Norton.
Next: Group Project
Up: Michaelmas Term 2002: Part
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Christine Northeast
Wed Sep 4 14:43:05 BST 2002