Owen Graduate School of Management
Vanderbilt University
Spring 2002, Module III


Competitive Strategies for Network Economies
MGT 523

Course Information

Instructor Information

Mike Shor
Room 352
Phone: 343-4334
e-mail: Mike.Shor@owen.vanderbilt.edu

Course web site: http://www2.owen.vanderbilt.edu/mike.shor/courses/NetEcon/

Course Description

In this course we labor to understand the fundamental economic forces shaping the Network Economy. Loosely stated, network economies exhibit economies in which the value of a good for one person increases with the number of other people who use the good. In that sense, many traditional durable goods are excluded (I don't care if my friends use the same brand of toothpaste), but most technology-oriented goods are considered. These types of economies present new challenges - a critical mass of users will drive others to adopt the same technology, leading to winner-take-all markets.

We consider winning strategies, including product differentiation, versioning, and taking advantage of consumer lock-in. Further, we will concentrate on the management of information, not in the MIS or IT sense, but in terms of gaining value from proprietary information property, being mindful of the role of illicit copying or sharing and government regulation.

At the completion of the course, a successful student will be able to:


The text for this course is
Carl Shapiro and Hal R. Varian. Information Rules: A Strategic Guide to the Network Economy. Boston: Harvard Business School Press, 1999.

There will also be additional readings available online on the course web site.


Read the assigned text chapter and all other readings prior to each lecture. Class discussion and presentations will be a critical part of the course. Hence, students should be prepared to contribute to the discussion.


Your grade will depend on three group deliverables, two group presentations, a ten minute lecture presentation, and participation in class discussions.

  • Group Deliverables
  • Group Presentations
  • Lecture Presentation
  • Participation


Each student will be assigned a chapter of the (main or supplementary) text to present. Your presentation should discuss current events related to what is in the chapter. You may also discuss any developments that have occurred since the publishing of the book that are directly related to cases discussed in the chapter. Further, you should include any background information related to what is discussed in the chapter. A presentation should be limited to fifteen minutes, and additional time will be allowed for questions.

Further, each group will present two of the three group deliverables. These should also be limited to fifteen minutes, with additional time for questions. A calendar of presenters will be issued early in the mod. Students will evaluate the presentations of classmates.

Presentations will be graded based on how well-organized, understandable, and interesting they are:

For group presentations, a group may divide the presentation however it sees fit - it is absolutely acceptable for one person to present, or for the whole group to present.

Feel free to see me if you would like me to review any of your material prior to your talk.

All power-point slides should be emailed to me the day prior to a presentation.

Grading Criteria

Specifically, the break-down is:
  • Professionalism, presentation, quality of writing , clarity
  • Relevance, originality, and degree of difficulty of topic
  • Insight, value of advice to recipient, intuition
  • Sophistication, analytical skill, and proper application of concepts


I am happy to review drafts of your papers prior to the due date. I encourage students to discuss their ideas with me, and prepare drafts far enough in advance to leave time for me to review them and for the group to incorporate the comments. I will provide advice relative to how far along the draft is. That is, an outline will receive less specific comments than a draft nearing completion. Drafts are not required. You are not assured of any particular grade if I review your paper and make suggestions for improvements.

Due Dates

Assignments are due at the beginning of class 5, 9, and 13. Memos may be submitted by e-mail but must be submitted at the beginning of the class in which they are due. Late assignments will not be accepted. All power-point slides should be emailed to me the day prior to a presentation.