Slides9_Midterm_Summary

Slides9_Midterm_Summary - The Information Economy Summary 1...

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The Information Economy Summary 1
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Strategy 101 2 Value pie Value of industry = buyers’ values minus total costs Firm’s value = value of industry × firm’s share of pie Six forces Substitutes, rivals, entrants, suppliers, buyers, complements Market definition What is relevant for the question you are asking? Coherent strategies Choices that complement each other.
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Information Goods 3 What’s special about information goods? High fixed, low marginal costs. Market type 1: differentiated goods Horizontal differentiation Vertical differentiation Market type 2: dominant firm First mover advantage Technological or cost advantage Other aspects of information goods Long tail, customizability, user created content, experimentation and adaptation, market design.
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How to Price 4 Basic rule: Monopoly formula from Econ 101. Price discrimination
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Slides9_Midterm_Summary - The Information Economy Summary 1...

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