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Economic Perspectives on Software Design: PC Operating Systems and Platforms

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Author Info
Steven J. Davis
Jack MacCrisken
Kevin M. Murphy

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Abstract

Improvements in the software that provides hardware management, user interface and platform functions have played a central role in the growth and transformation of the personal computer (PC) industry. Several forces shape the design of these 'operating system' products and propel their evolution over time, including: A. The need to efficiently manage the interacting components of PC systems so as to keep pace with rapid advances in computer technologies the development of applications software. B. The need to maintain compatibility with existing applications while preserving the flexibility to incorporate additional functions that support new applications. C. The desire to economize on customer support costs and assign clear responsibility for making the interacting components of the PC work together. D. The desire to bundle multiple software features into a single package so as to more effectively meet the demand for complementary applications or reduce the diversity in product valuations among consumers. We analyze these forces and the factors that determine whether and when new features and functions are included in commercial operating system products. We also explain how this integration and bundling spurs growth in the PC industry and fosters innovation.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8411.

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Date of creation: Aug 2001
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Handle: RePEc:nbr:nberwo:8411

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Find related papers by JEL classification:
L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Yohanes E. Riyanto & Armin Schwienbacher, 2001. "On the Strategic Use of Corporate Venture Financing for Securing Demand," Departmental Working Papers wp0109, National University of Singapore, Department of Economics. [Downloadable!]
  2. Boudreau, Kevin, 2006. "The Boundaries of the Platform: Vertical Integration and Economic Incentives in Mobile Computing," Working papers 30609, Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
  3. David S. Evans & Andrei Hagiu & Richard Schmalensee, 2004. "A Survey of the Economic Role of Software Platforms in Computer-Based Industries," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  4. Steven J. Davis & Kevin M. Murphy & Robert H. Topel, 2001. "Entry, Pricing and Product Design in an Initially Monopolized Market," NBER Working Papers 8547, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
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