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Operating System Prices In The Home Pc Market

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Author Info
Jerome Foncel
Marc Ivaldi

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Abstract

Because the demand for OS is a derived demand revealed through the demand for PCs and because its elasticity is relatively small, the profit-maximizing price of DOS/WIN that would result from a static equilibrium is much higher than the observed price. We investigate this assertion empirically by fitting a differentiated-products model of the home PC market to panel data of all PC brands sold in the G7 countries over the period 1995-1999. The results confirm that the low value of the aggregate elasticity of demand for PCs is the result of differentiation and substitution among PCs. Copyright Blackwell Publishing Ltd. 2005.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.0022-1821.2005.00254.x
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Publisher Info
Article provided by Blackwell Publishing in its journal The Journal of Industrial Economics.

Volume (Year): 53 (2005)
Issue (Month): 2 (06)
Pages: 265-297
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:bla:jindec:v:53:y:2005:i:2:p:265-297

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821

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  1. John Van Reenen, 2004. "Is There a Market for Work Group Servers? Evaluating Market Level Demand Elasticities Using Micro and Macro Models," CEP Discussion Papers dp0650, Centre for Economic Performance, LSE. [Downloadable!]
  2. Ivaldi, Marc & Lörincz, Szabolcs, 2005. "A Full Equilibrium Relevant Market Test: Application to Computer Servers," CEPR Discussion Papers 4917, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. John Van Reenen, 2005. "The Growth of Network Computing: Quality Adjusted Price Changes for Network Servers," CEP Discussion Papers dp0702, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
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This page was last updated on 2009-11-22.

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