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I recently went through the article on "Advice for Computer Science College Students", by Joel Spolsky - http://www.joelonsoftware.com/articles/CollegeAdvice.html .

In that Joel says that a programmer who understands the fundamentals of business is going to be a more valuable programmer, to a business, than a programmer who doesn't. Many ideas do make sense in code, but not in business.

I'd like to know if there are some quick reference manuals for CS students to learn micro-economics. I'd like to know the ebooks that would help one to understand the basics of it.

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You should also read up on business administration. It'll help (if only a little) explain why businesses make the decisions that they do in regards to software development. –  John Shaft Apr 5 '11 at 12:14
Actually, I think everybody should understand a little microeconomics and business administration. It would eliminate a lot of stupid claims I see nowadays (like "we had to raise prices because our fixed costs went up"). –  David Thornley Apr 5 '11 at 14:58
If the engineers at Google knew about Network Externalities, they would've rolled out Wave much differently. Knowing how markets work is beneficial to anyone making a product. –  Macneil May 5 '11 at 12:54

4 Answers 4

Speaking as an Economics major (which, by the way, is one of my biggest regrets in life, but I digress) I don't think micro-economics will help you one bit with what you want.

In that Joel says that a programmer who understands the fundamentals of business is going to be a more valuable programmer, to a business, than a programmer who doesn't. Many ideas do make sense in code, but not in business.

Then take business classes, not a social (pseudo) science class. Micro-economics won't tell you a thing about running a business, but it will help you identify market factors that can come into play that will affect your business, however, for the most part that is pretty obvious if you just sit and think about it for awhile.

That being said, there is a branch of economics that is possibly very beneficial to programmers and that is Behavioral Economics. Behavioral Economics mixes psychology with economics which can make for much better models (I know in school all our models were based on a rational human, which, as far as I can tell, doesn't exist). With behavioral economics, you could be a huge asset to a team by figuring out why people buy the way they do and then tailoring your product to that certain factor that causes people to buy. I'm sorry that I don't have any books for behavioral economics but there are some listed on the wikipedia.

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I like The Undercover Economist, it's a pocket book, well worth reading. It's not an academic book and it's very entertained.

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"Freakonomics" is also another entertaining read with some good info in it. –  Steve Haigh Apr 11 '11 at 16:39

I would recommend Information Rules, which is mostly about pricing strategies for software. It is surprisingly relevant for working programmers who wonder at how the software they work with came to have such crazy pricing.

It is somewhat dated because it was written during the dot com boom. Therefore a lot hadn't been worked out yet about pricing websites or mobile applications. On the other hand the underlying economic principles have not changed and provide a good framework for thinking about things you will encounter.

I should note that one of the two co-authors (Hal Varian) is currently the Chief Economist for Google.

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I would suggest you use http://www.khanacademy.org/ and go through the Finance and Valuation/Investing sections... I think you'd get more out of those than plain micro-econ...

For just micro, I would skip the "pop" econ books and pick up a college introductory micro-econ or managerial econ textbook instead. This is what we used in my MS program, for people that hadn't had exposure to econ:

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