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Department of Computer Science and Technology



Course pages 2023–24

Economics, Law and Ethics

Principal lecturer: Dr Alice Hutchings
Taken by: Part IB CST
Term: Michaelmas
Hours: 8
Format: In-person lectures
Suggested hours of supervisions: 2
This course is a prerequisite for: Business Studies, Cybercrime, E-Commerce
Exam: Paper 7 Question 3, 4
Past exam questions, Moodle, timetable


This course aims to give students an introduction to some basic concepts in economics, law and ethics.


  • Classical economics and consumer theory. Prices and markets; Pareto efficiency; preferences; utility; supply and demand; the marginalist revolution; elasticity; the welfare theorems; transaction costs.
  • Information economics. The discriminating monopolist; marginal costs; effects of technology on supply and demand; competition and information; lock in; real and virtual networks; Metcalfe’s law; the dominant firm model; price discrimination; bundling; income distribution.
  • Market failure and behavioural economics. Market failure: the business cycle; recession and technology; tragedy of the commons; externalities; monopoly rents; asymmetric information: the market for lemons; adverse selection; moral hazard; signalling. Behavioural economics: bounded rationality, heuristics and biases; nudge theory; the power of defaults; agency effects.
  • Auction theory and game theory. Auction theory: types of auctions; strategic equivalence; the revenue equivalence theorem; the winner’s curse; problems with real auctions; mechanism design and the combinatorial auction; applicability of auction mechanisms in computer science; advertising auctions. Game theory: the choice between cooperation and conflict; strategic forms; dominant strategy equilibrium; Nash equilibrium; the prisoners’ dilemma; evolution of strategies; stag hunt; volunteer’s dilemma; chicken; iterated games; hawk-dove; application to computer science.
  • Principles of law. Criminal and civil law; contract law; choice of law and jurisdiction; arbitration; tort; negligence; defamation; intellectual property rights.
  • Law and the Internet. Computer evidence; the General Data Protection Regulation; UK laws that specifically affect the Internet; e-commerce regulations; privacy and electronic communications.
  • Philosophies of ethics. Authority, intuitionist, egoist and deontological theories; utilitarian and Rawlsian models; morality; insights from evolutionary psychology, neurology, and experimental ethics; professional codes of ethics; research ethics.
  • Contemporary ethical issues. The Internet and social policy; current debates on privacy, surveillance, and censorship; responsible vulnerability disclosure; algorithmic bias; predictive policing; gamification and engagement; targeted political advertising; environmental impacts.


On completion of this course, students should be able to:

  • Reflect on and discuss professional, economic, social, environmental, moral and ethical issues relating to computer science
  • Define and explain economic and legal terminology and arguments
  • Apply the philosophies and theories covered to computer science problems and scenarios
  • Reflect on the main constraints that market, legislation and ethics place on firms dealing in information goods and services

Recommended reading

* Shapiro, C. & Varian, H. (1998). Information rules. Harvard Business School Press.
Hare, S. (2022). Technology is not neutral: A short guide to technology ethics. London Publishing Partnership.

Further reading:

Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations, available at
Thaler, R.H. (2016). Misbehaving. Penguin.
Galbraith, J.K. (1991). A history of economics. Penguin.
Poundstone, W. (1992). Prisoner’s dilemma. Anchor Books.
Pinker, S (2011). The Better Angels of our Nature. Penguin.
Anderson, R. (2008). Security engineering (Chapter 7). Wiley.
Varian, H. (1999). Intermediate microeconomics - a modern approach. Norton.
Nuffield Council on Bioethics (2015) The collection, linking and use of data in biomedical research and health care.