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Information Rules: A Strategic Guide to the Network Economy Hardcover – November 19, 1998

4.6 out of 5 stars 129

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In Information Rules, authors Shapiro and Varian reveal that many classic economic concepts can provide the insight and understanding necessary to succeed in the information age. They argue that if managers seriously want to develop effective strategies for competing in the new economy, they must understand the fundamental economics of information technology. Whether information takes the form of software code or recorded music, is published in a book or magazine, or even posted on a website, managers must know how to evaluate the consequences of pricing, protecting, and planning new versions of information products, services, and systems. The first book to distill the economics of information and networks into practical business strategies, Information Rules is a guide to the winning moves that can help business leaders navigate successfully through the tough decisions of the information economy.

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Editorial Reviews

Amazon.com Review

Chapter 1 of Information Rules begins with a description of the change brought on by technology at the close of the century--but the century described is not this one, it's the late 1800s. One hundred years ago, it was an emerging telephone and electrical network that was transforming business. Today it's the Internet. The point? While the circumstances of a particular era may be unique, the underlying principles that describe the exchange of goods in a free-market economy are the same. And the authors, Carl Shapiro and Hal Varian, should know. Shapiro is Professor of Business Strategy at the Haas School of Business at UC Berkeley and has also served as chief economist at the Antitrust Division of the Justice Department. Varian is the Dean of the School of Information Management and Systems at UC Berkeley. Together they offer a deep knowledge of how economic systems work coupled with first-hand experience of today's network economy. They write: Sure, today's business world is different in a myriad of ways from that of a century ago. But many of today's managers are so focused on the trees of technological change that they fail to see the forest: the underlying economic forces that determine success and failure. Shapiro and Varian go to great lengths to purge this book of the technobabble and forecasting of an electronic woo-woo land that's typical in books of this genre. Instead, with their feet on the ground, they consider how to market and distribute goods in the network economy, citing examples from industries as diverse as airlines, software, entertainment, and communications. The authors cover issues such as pricing, intellectual property, versioning, lock-in, compatibility, and standards. Clearly written and presented, Information Rules belongs on the bookshelf of anyone who has an interest in today's network economy--entrepreneurs, managers, investors, students. If there was ever a textbook written on how to do business in the information age, this book is it. Highly recommended. --Harry C. Edwards

From Booklist

In this day and information age, it is all about those who are able to utilize the information they have to maximize potential, and these two University of California, Berkeley, professors have assembled the guide to do just that. The nuts-and-bolts approach to finding ways to differentiate one's product from all the others, and a how-to guide to simplify and improve customer interface, are both helpful, and the idea of managing intellectual properties to maximize value is infinitely superior to just protecting them from competitors. Some of the information delves into building positive feedback for the product, and every businessperson probably needs to know some of the legal ins and outs of building alliances and the ramifications of competition. Shapiro and Varian seem to be targeting the hard-core student of business here (not the casual browser); their approach is extremely thorough, and there is much practical information for those willing to wade through the information rules. Joe Collins

Product details

  • Publisher ‏ : ‎ Harvard Business Review Press (November 19, 1998)
  • Language ‏ : ‎ English
  • Hardcover ‏ : ‎ 368 pages
  • ISBN-10 ‏ : ‎ 087584863X
  • ISBN-13 ‏ : ‎ 978-0875848631
  • Item Weight ‏ : ‎ 1.56 pounds
  • Dimensions ‏ : ‎ 6.5 x 1.25 x 9.75 inches
  • Customer Reviews:
    4.6 out of 5 stars 129

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4.6 out of 5 stars
4.6 out of 5
129 global ratings

Top reviews from the United States

Reviewed in the United States on December 21, 2023
I read this book first time in 1999, in a MBA course about technology and innovation.
For me, this is still the best book about economic theory applied to information economy. This book is a must. Great work from Varian and Shapiro.
Reviewed in the United States on June 24, 2008
This book is the basis for so much that we already know - or should know. Re-reading it this year (2008) after so long was a shock to my senses. It showed me how on target the economic principles expressed between the covers were.

Of course, that is one of the points of the book: old economic principles still hold in "new" economies. The strategies of the most successful firms today can be held up against the principles of this book as a standard - and they will be in synch.

If you've never read it, I highly recommend it - especially if you are in or planning to enter the tech economy. Do not be fooled by some of the "dated" material, since some time has obviously passed since its first publication. There are comments about technological developments held in suspense for the authors at that time - the outcome of which we are already well aware. For example, the authors make much of Netscape's stardom of that time. Now, of course, it is a different story. Regardless, such examples do not diminish the fundamental economics lesson in this book.
5 people found this helpful
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Reviewed in the United States on November 13, 2014
This book tied together a lot of concepts that I was vaguely aware of e.g. lock-in, discounting of information products and standards wars. Until reading it however had no idea that these and other information economy strategies could all be treated together in such a holistic way. The book is clearly written in the form of a text-book. It takes a bit of concentration to read it but it's worth it if you can spare the time. Although old, the examples described in the book are timeless and are completely relevant to the information economy of today.
4 people found this helpful
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Reviewed in the United States on November 4, 2009
When I bought this book I really expected it was addressed to a very specific professional area, like Computer Scientists or Economists, or even MBA students. I was completly wrong. In fact, this well-written book clarifies many thinks about the important value of information, concepts, relationshipments and additionally rich samples. Consequently, we start to have a better comprehention about several business involved with "Information" (I mean: nowadays, everything, every commercial and non-commercion relationshipment). It is 100% recommmended, no matter what is your work or your dedicated area of studying. Information really rules...
One person found this helpful
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Reviewed in the United States on November 6, 2020
I learned about the book and read it twenty years after its first release and I still think it's quite relevant to what we do in IT world. It's truly about durable economics principles.
2 people found this helpful
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Reviewed in the United States on January 1, 2020
Topics
- differential pricing
- zero marginal cost economy
- lock in
- role of standards
- policy making
- network externalities and positive feedback
One person found this helpful
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Reviewed in the United States on February 14, 2014
An amazing book that lays a coherent background to understanding network markets. I have read many papers on this but this is the first book I found that lays it in plain english and a coherent easy-to-understand book. A must read for any economist (or even for the general public!) interested in network economies.
One person found this helpful
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Reviewed in the United States on March 30, 2017
The book is actually excellent, and one I read first in 1999, and again several times. The book made me aware of Hal Varian and led me to get an MS in Information Management and Systems at the School of Information at UC Berkeley (Varian was the Dean of the school during my time there, 1999-2001).

There need to be three stars here because:

- The Kindle price is higher than all other prices
- One of the rather important economic points of a digital economy is high initial costs, and virtually no reproduction costs (for digital goods)

On 30 March 2017, the paperback, new was priced at $15.54, while the Kindle ebook was $18.95

Shame on Harvard Business Review Press, and Amazon Digital Services LLC.
One person found this helpful
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Top reviews from other countries

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rigaud
4.0 out of 5 stars Un classique
Reviewed in France on February 3, 2018
Un classique qui mérite sa réputation pour aborder quelques enjeux de l'économie digitale. De plus l'ouvrage est très pédagogique et claire.
Viktor
5.0 out of 5 stars Die Start-UP Bibel
Reviewed in Germany on November 10, 2016
Auch wenn das Buch schon ein wenig Älter ist trifft der Großteil der „Regeln“ für da heutige Informationszeitalter noch zu. Der Autor gibt auch heut noch eine Vision wie sich die Informationstechnik und die Welt in den nächsten Jahren verändern wird. Das Buch hat Suchfaktor und lässt sich sehr gut lesen. Klare Empfehlung von mir.
One person found this helpful
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Shyam
5.0 out of 5 stars Still relevant
Reviewed in India on July 18, 2016
Examples are a bit dated. But contents still relevant. Extremely well written.
dominic
4.0 out of 5 stars Four Stars
Reviewed in India on July 29, 2018
Excellent economic backgrounder for anybody entering the IT field.
Fried-Heye Weinert
5.0 out of 5 stars The definitive book on the information economy
Reviewed in Germany on May 16, 2015
This book was used as basis in a course about information economics in grad school. It is a visionary book describing the phenomena we are witnessing in todays economy.