14.27 | Fall 2014 | Undergraduate

Economics and E-Commerce


There isn’t really a good textbook for studying e-commerce, so coming to class and taking good notes will be particularly important. Some of the general economics topics I will cover in the beginning 

[C&W] = Church, Jeffrey, and Roger Ware. Industrial Organization: A Strategic Approach. McGraw-Hill, 1999. ISBN: 9780256205718.

[PRN] = Pepall, Lynne, Dan Richards, and George Norman. Industrial Organization: Contemporary Theory and Empirical Applications. Wiley-Blackwell, 2008. ISBN: 9781405176323.

I will not assign readings out of them. Rather, I suggest looking at them when economic models covered in lecture are not clear. There will also be newspaper and academic articles assigned throughout the semester, as well as required web surfing.

Review Readings


[C&W] Chapter 4.

[PRN] Chapter 5 and 6.

Strategic Behavior in Oligopoly Markets

[C&W] Chapters 7 and 8.

[PRN] Chapters 9 and 10.


[C&W] Chapters 14, 15, 20, and 21.

[PRN] Chapters 12 and 13.

Additional Readings

Goldfarb, Avi, and Catherine Tucker. “Advertising Bans and the Substitutability of Online and Offline Advertising.” May 4, 2010.

———. “Privacy Regulation and Online Advertising.” Management Science 57, no. 1 (2010): 57–71.

Ellison, Sara Fisher, and Christopher M. Snyder. “Countervailing Power in Wholesale Pharmaceuticals.” The Journal of Industrial Economics 58, no. 1 (2010): 32–53.

Lucking-Reiley, David. “Auctions on the Internet: What’s Being Auctioned, and How?The Journal of Industrial Economics 48, no. 3 (2000): 227–52.

———. “Vickrey Auctions in Practice: From Nineteenth Century Philately to Twenty-first Century E-commerce.” Journal of Economic Perspectives 14, no. 3 (2000): 183–92.

Ellison, Glenn, Drew Fudenberg, et al. “Competing Auctions.” Journal of the European Economic Association 2, no. 1 (2004): 30–66.

Byers, John W., Michael Mitzenmacher, et al. “Daily Deals: Prediction, Social Diffusion, and Reputational Ramifications.” (PDF) September 7, 2011.

———. “The Groupon Effect on Yelp Ratings: A Root Cause Analysis.” Association for Computing Machinery (2012): 248–65. [arXiv:1202.2369]

Bajari, Patrick, and Ali Hortaçsu. “Economic Insights from Internet Auctions.” Journal of Economic Literature 42, no. 2 (2004): 457–86.

Enos, Lori. “Fees Cause Yahoo! Auctions to Drop More Than 80 Percent,” E-commerce Times, February 13, 2001.

Goolsbee, Austan. “In a World Without Borders: The Impact of Taxes on Internet Commerce.” The Quarterly Journal of Economics 115, no. 2 (2000): 561–76.

Edelman, Benjamin, Michael Ostrovsky, et al. “Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords.” NBER Working Paper No. 11765, 2005.

Stahl II, Dale O. “Oligopolistic Pricing with Sequential Consumer Search.” The American Economic Review 79, no. 4 (1989): 700–12.

Golder, Peter N., and Gerard J. Tellis. “Pioneer Advantage: Marketing Logic or Marketing Legend?” Journal of Marketing Research 30, no. 2 (1993): 158–70.

Hossain, Tanjim, and John Morgan. “Plus Shipping and Handling: Revenue (Non) Equivalence in Field Experiments on eBay.” (PDF) Advances in Economic Analysis & Policy 6, no 2 (2006): 63–91.

Athey, Susan, and Glenn Ellison.  “Position Auctions with Consumer Search.” The Quarterly Journal of Economics 126, no. 3 (2011): 1213–70.

Einav, Liran, Chiara Farronato, et. al. “Sales Mechanisms in Online Markets: What Happened to Internet Auctions?” NBER Working Paper No. 19021, 2013.

Einav, Liran, Dan Knoepfle, et. al. “Sales Taxes and Internet Commerce.” American Economic Review 104, no. 1 (2014): 1–26.

Levy, Steven. “Secret of Googlenomics: Data-Fueled Recipe Brews Profitability.” Wired. May 22, 2009.

Ellison, Glenn, and Sara Fisher Ellison. “Tax Sensitivity and Home State Preferences in Internet Purchasing.” American Economic Journal: Economic Policy 1, no. 2 (2009): 53–71.

Articles about Amazon.com

Barney, Lee. “Amazon.com: Forget Being Earth’s Superstore. Can It Turn a Profit?,” The Street, December 18, 2000.

Acohido, Byron. “Amazon: We’ll Be Profitable by Year’s End,” USA Today, February 6, 2002.

Thomas, Owen. “Amazon.com Tests the Notion of Fixed Prices.” Business 2.0. September 28, 2000.

Angwin, Julia, and Dana Mattioli. “Don’t Like This Price? Wait a Minute,” The Wall Street Journal, September 5, 2012.

Gannett, Allen. “Behavioral Pricing: A Consumer’s Worst Nightmare, A Merchant’s Dream,” The Next Web, January 21, 2012.

Luhby, Tami. “Get Ready to Pay Sales Tax on Amazon.” CNN Money. July 18, 2012.

Streitfeld, David. “Amazon, Forced to Collect a Tax, Is Adding Roots,” New York Times, September 11, 2012.

Manjoo, Farhard. “I Want it Today: How Amazon’s Ambitious New Push for Same-day Delivery will Destroy Local Retail..” Slate.com, July 11, 2012.

Course Info

As Taught In
Fall 2014
Learning Resource Types
Problem Sets with Solutions
Exams with Solutions
Lecture Notes
Written Assignments with Examples