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Richard Schmalensee

Richard L. Schmalensee is John C. Head III Dean and Professor of Management and Economics at the MIT Sloan School of Management. He is co-editor of Management: Inventing and Delivering Its Future (MIT Press, 2003).

Titles by This Author

How Software Platforms Drive Innovation and Transform Industries

Software platforms are the invisible engines that have created, touched, or transformed nearly every major industry for the past quarter century. They power everything from mobile phones and automobile navigation systems to search engines and web portals. They have been the source of enormous value to consumers and helped some entrepreneurs build great fortunes. And they are likely to drive change that will dwarf the business and technology revolution we have seen to this point. Invisible Engines examines the business dynamics and strategies used by firms that recognize the transformative power unleashed by this new revolution--a revolution that will change both new and old industries.The authors argue that in order to understand the successes of software platforms, we must first understand their role as a technological meeting ground where application developers and end users converge. Apple, Microsoft, and Google, for example, charge developers little or nothing for using their platforms and make most of their money from end users; Sony PlayStation and other game consoles, by contrast, subsidize users and make more money from developers, who pay royalties for access to the code they need to write games. More applications attract more users, and more users attract more applications. And more applications and more users lead to more profits.Invisible Engines explores this story through the lens of the companies that have mastered this platform-balancing act. It offers detailed studies of the personal computer, video game console, personal digital assistant, smart mobile phone, and digital media software platform industries, focusing on the business decisions made by industry players to drive profits and stay a step ahead of the competition. Shorter discussions of Internet-based software platforms provide an important glimpse into a future in which the way we buy, pay, watch, listen, learn, and communicate will change forever. An electronic version of this book is available under a Creative Commons license.

The Digital Revolution in Buying and Borrowing

The payment card business has evolved from its inception in the 1950s as a way to handle payment for expense-account lunches (the Diners Club card) into today's complex, sprawling industry that drives trillions of dollars in transaction volume each year. Paying with Plastic is the definitive source on an industry that has revolutionized the way we borrow and spend. More than a history book, Paying with Plastic delivers an entertaining discussion of the impact of an industry that epitomizes the notion of two-sided markets: those in which two or more customer groups receive value only if all sides are actively engaged. New to this second edition, the two-sided market discussion provides useful insight into the implications of these market dynamics for cardholder rewards, merchant interchange fees, and card acceptance. The authors, both of whom have researched the industry for more than 25 years, also examine the implications of the recent antitrust cases on the industry as well as other business and technological changesincluding the massive consolidation brought about by bank mergers, the rise of the debit card, and the emergence of e-commercethat could alter the payment card industry dramatically in the years to come.

Inventing and Delivering Its Future

The MIT Sloan School of Management, as conceived by the legendary General Motors chairman Alfred P. Sloan, was founded in 1952 to draw on the scientific and technical resources of MIT and approach the problems of management with the rigorous research practices for which MIT was famous. Fifty years later, the Sloan School gathered international leaders in business and management, MIT faculty, students, and alumni to address again the basic principles that should guide business and management. This book presents the papers prepared by student-faculty teams, speeches by business and world leaders, and summaries of the discussions from this special convocation; taken together, they offer a guide to the future of management based on the hallmarks of MIT and Sloan—creativity and innovation.

The topics considered coalesced around three main themes. First, and paramount, is the necessity of building and maintaining trust by means of openness, transparency, and accountability; this was addressed in speeches by Kofi Annan and Carly Fiorina and exemplified by the case study presented of Nike?s efforts to rebuild the trust of customers. The increasingly complex conditions of the modern global economy emerged as another recurring theme, as the participants considered the effect of the growing spectrum of stakeholders on issues of corporate governance. The third common theme was the inescapability of technological and scientific change, from the Internet as a marketing tool to the organizational impact of information technology.

An Analysis of Electric Utility Deregulation

Markets for Power provides an unusually complete analysis of the economic, technical, and institutional aspects of the electric utility industry. The authors evaluate four currently popular options for deregulating this unique segment of the economy, and in a balanced program for reform, they advise against total deregulation and recommend a cautious approach to even partial deregulation.

Paul L. Joskow is Professor of Economics and Richard Schmalensee is Professor of Applied Economics, both at MIT

Titles by This Editor

Inventing and Delivering Its Future

The MIT Sloan School of Management, as conceived by the legendary General Motors chairman Alfred P. Sloan, was founded in 1952 to draw on the scientific and technical resources of MIT and approach the problems of management with the rigorous research practices for which MIT was famous. Fifty years later, the Sloan School gathered international leaders in business and management, MIT faculty, students, and alumni to address again the basic principles that should guide business and management. This book presents the papers prepared by student-faculty teams, speeches by business and world leaders, and summaries of the discussions from this special convocation; taken together, they offer a guide to the future of management based on the hallmarks of MIT and Sloan—creativity and innovation.

The topics considered coalesced around three main themes. First, and paramount, is the necessity of building and maintaining trust by means of openness, transparency, and accountability; this was addressed in speeches by Kofi Annan and Carly Fiorina and exemplified by the case study presented of Nike?s efforts to rebuild the trust of customers. The increasingly complex conditions of the modern global economy emerged as another recurring theme, as the participants considered the effect of the growing spectrum of stakeholders on issues of corporate governance. The third common theme was the inescapability of technological and scientific change, from the Internet as a marketing tool to the organizational impact of information technology.