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Open Source vs Closed Source Software: Public Policies in the Software Market

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Author Info
Stefano Comino (Dipartimento di Scienze Economiche "M. Fanno" Universita' di Padova ITALY)
Fabio M. Manenti (Dipartimento di Scienze Economiche "M. Fanno" Universita' di Padova ITALY)

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Abstract

This paper analyses the impact of public policies supporting open source software (OSS). Users can be divided between those who know about the existence of OSS, the "informed" adopters, and the "uninformed" ones; the presence of uniformed users yields to market failures that justify government intervention. We study three policies: i) mandatory adoption, when government forces public agencies, schools and universities to adopt OSS, ii) information campaign, when the government informs the uninformed users about the existence and the characteristics of OSS and, iii) subsidisation, when consumers are payed a subsidy when adopting OSS. We show that the second policy enhances welfare, the third is always welfare decreasing while mandatory adoption can be either good or bad for society depending on the number of informed and uninformed adopters. We extend the model to the presence of network effects and we show that strong externalities require "drastic" policies.

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Publisher Info
Paper provided by EconWPA in its series Industrial Organization with number 0306001.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 33 pages
Date of creation: 16 Jun 2003
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Handle: RePEc:wpa:wuwpio:0306001

Note: Type of Document - pdf; prepared on Latex; to print on PostScript; pages: 33; figures: included
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Web page: http://129.3.20.41

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Related research
Keywords: software market; open source software; mandatory adoption; information campaign; subsidisation; network externalities;

Find related papers by JEL classification:
O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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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.:
  1. Schmidt, Klaus M. & Schnitzer, Monika, 2003. "Public Subsidies for Open Source? Some Economic Policy Issues of the Software Market," CEPR Discussion Papers 3793, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  2. Erik Brynjolfsson & Chris F. Kemerer, 1993. "Network Externalities in Microcomputer Software: An Econometric Analysis of the Spreadsheet Market," Working Paper Series 158, MIT Center for Coordination Science. [Downloadable!]
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Cited by:
(explanations, 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.)

  1. Evangelos Katsamakas & Mingdi Xin, 2005. "An economic analysis of enterprise adoption of open source software," Working Papers 05-29, NET Institute, revised Oct 2005. [Downloadable!]
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This page was last updated on 2009-11-13.

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