Lecture 5

Lecture 5 Online Markets - Slides

  • Online marketplaces
    • Priceline.com, hotels.com, Orbitz.com etc.
  • Auctions
    • How they work; why the internet makes them easier
      • Counterparty risk - importance of customer feedback; fraud
    • The importance of price
    • IMPORTANT - The network effect
    • eBay, Amazon. other online retail auctions
      • Heavy community involvement
      • Business model
    • eBay and other stores
  • Payment systems - PayPal
    • Why did we need PayPal?
    • The network effect again
  • Effect of the internet on competition and pricing
    • Is the internet good for business?
    • Should businesses change the way they set prices because of the internet?
  • Search
    • Why search costs are a big deal
    • How we used to search
    • Economics of search
      • Customer feedback
    • Price comparison sites
    • Network search
      • Characteristics of networks - small world effect
    • to come
  • Search engines and portals
    • Portals
    • Business models
  • Lock-in and switching costs
    • Why so many things are free on the internet - Hotmail, gmail, Wikidot etc?
  • Online marketplaces
    • eBay, Amazon shops, Yahoo! Shops and competitors
    • Priceline, hotels.com etc.
    • Job markets
    • Dating markets
      • What does eHarmony tell us?
    • B2B markets
    • Social networking sites
    • Economics of online marketplaces
      • The importance of the network effect
      • Economies of scale
      • Amazon's web services
  • Other Web 2.0 businesses
  • Review of Assignment 4
    • Importance of network effects to profitability
      • The network effect creates monopolies
      • Monopolies are more profitable than competitive firms
      • Not every product exhibits network effects
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