IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v53y2005i2p265-297.html

Operating System Prices In The Home Pc Market

Author

Listed:
  • Jerome Foncel
  • Marc Ivaldi

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.

Suggested Citation

  • Jerome Foncel & Marc Ivaldi, 2005. "Operating System Prices In The Home Pc Market," Journal of Industrial Economics, Wiley Blackwell, vol. 53(2), pages 265-297, June.
    • Handle: RePEc:bla:jindec:v:53:y:2005:i:2:p:265-297
    DOI: 10.1111/j.0022-1821.2005.00254.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.0022-1821.2005.00254.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.0022-1821.2005.00254.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. ANDERSON, Simon P. & de PALMA, André & THISSE, Jacques-François, 1992. "Interpretations of the logit discrete choice models and the theory of product differentiation," LIDAM Reprints CORE 1017, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Wegberg,Marc,van, 1998. "Evolution and Competition in the Market for Handheld Computers," Research Memorandum 003, Maastricht University, Netherlands Institute of Business Organization and Strategy Research (NIBOR).
    3. repec:aei:rpbook:53444 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ivaldi, Marc & Toru-Delibaşı, Tuba, 2018. "Competitive impact of the air ticket levy on the European airline market," Transport Policy, Elsevier, vol. 70(C), pages 46-52.
    2. Van Reenen, John, 2004. "Is there a market for work group servers? Evaluating market level demand elasticities using micro and macro models," LSE Research Online Documents on Economics 773, London School of Economics and Political Science, LSE Library.
    3. Bonnet, Céline & Richards, Timothy J., 2016. "Models of Consumer Demand for Differentiated Products," TSE Working Papers 16-741, Toulouse School of Economics (TSE).
    4. Ivaldi, Marc & Lörincz, Szabolcs, 2005. "A Full Equilibrium Relevant Market Test: Application to Computer Servers," IDEI Working Papers 341, Institut d'Économie Industrielle (IDEI), Toulouse.
    5. John Van Reenen, 2006. "The Growth of Network Computing: Quality-Adjusted Price Changes for Network Servers," Economic Journal, Royal Economic Society, vol. 116(509), pages 29-44, February.
    6. Christos Genakos & Kai‐Uwe Kühn & John Van Reenen, 2018. "Leveraging Monopoly Power by Degrading Interoperability: Theory and Evidence from Computer Markets," Economica, London School of Economics and Political Science, vol. 85(340), pages 873-902, October.
    7. Cremer, Helmuth & Muller-Vibes, Catherine, 2022. "Cost of the mission of transport and delivery of printed press: theory and evidence," TSE Working Papers 2022-1353, Toulouse School of Economics (TSE).
    8. Ginger Zhe Jin & Zhentong Lu & Xiaolu Zhou & Lu Fang, 2021. "Flagship Entry in Online Marketplaces," NBER Working Papers 29239, National Bureau of Economic Research, Inc.
    9. Ivaldi, Marc & Zhang, Jiekai, 2015. "Advertising competition in the French free-to-air television broadcasting industry," TSE Working Papers 15-578, Toulouse School of Economics (TSE), revised Apr 2018.
    10. Céline Bonnet, 2007. "Économétrie de la concurrence entre produits différenciés : théorie et méthodes empiriques," L'Actualité Economique, Société Canadienne de Science Economique, vol. 83(4), pages 555-580.
    11. Ivaldi, Marc & Sokullu, Senay & Toru-Delibasi, Tuba, 2015. "Airport Prices in a Two-Sided Market Setting: Major US Airports," TSE Working Papers 15-587, Toulouse School of Economics (TSE).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pierre Picard & Takatoshi Tabuchi, 2010. "Self-organized agglomerations and transport costs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 42(3), pages 565-589, March.
    2. De Palma, Andre & Motamedi, Kiarash & Picard, Nathalie & Waddell, Paul, 2007. "Accessibility and environmental quality: inequality in the Paris housing market," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 36, pages 47-74.
    3. de Grauwe, Paul & Gerba, Eddie, 2015. "Stock market cycles and supply side dynamics," FinMaP-Working Papers 45, Collaborative EU Project FinMaP - Financial Distortions and Macroeconomic Performance: Expectations, Constraints and Interaction of Agents.
    4. Biing‐Shiunn Yang & Chao‐Cheng Mai, 2009. "Löschian competition under demand uncertainty," Papers in Regional Science, Wiley Blackwell, vol. 88(4), pages 765-784, November.
    5. Aguirregabiria, Victor & Ho, Chun-Yu, 2012. "A dynamic oligopoly game of the US airline industry: Estimation and policy experiments," Journal of Econometrics, Elsevier, vol. 168(1), pages 156-173.
    6. Hend Ghazzai & Rim Lahmandi-Ayed, 2006. "Vertical differentiation, network externalities and compatibility decisions: an alternative approach," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00111166, HAL.
    7. Toshihiro Matsumura & Daisuke Shimizu, 2015. "Endogenous Flexibility In The Flexible Manufacturing System," Bulletin of Economic Research, Wiley Blackwell, vol. 67(1), pages 1-13, January.
    8. Andre De Palma & Fay Dunkerley & Stef Proost, 2010. "Trip Chaining: Who Wins Who Loses?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(1), pages 223-258, March.
    9. Simon P Anderson & Jacob K Goeree & Charles A Holt, 2001. "A Thoeretical Anlysis of Altruism and Decision Error in Public Goods Games," Levine's Working Paper Archive 563824000000000075, David K. Levine.
    10. Gilles Duranton, 1997. "La nouvelle économie géographique : agglomération et dispersion," Économie et Prévision, Programme National Persée, vol. 131(5), pages 1-24.
    11. Peitz, Martin, 1997. "Models a la Lancaster and a la Hotelling: when they are the same," Economics Letters, Elsevier, vol. 54(2), pages 147-154, February.
    12. Roberto Basile & Davide Castellani & Antonello Zanfei, 2009. "National boundaries and the location of multinational firms in Europe," Papers in Regional Science, Wiley Blackwell, vol. 88(4), pages 733-748, November.
    13. Xavier Vives, 2008. "Innovation And Competitive Pressure," Journal of Industrial Economics, Wiley Blackwell, vol. 56(3), pages 419-469, December.
    14. Keith Head & Thierry Mayer & John Ries, 2000. "On the Pervasiveness of Home Market Effects," Econometric Society World Congress 2000 Contributed Papers 0862, Econometric Society.
    15. Falck, Oliver & Heblich, Stephan & Lameli, Alfred & Südekum, Jens, 2012. "Dialects, cultural identity, and economic exchange," Journal of Urban Economics, Elsevier, vol. 72(2), pages 225-239.
    16. Francesco Di Comite & Jacques-François Thisse & Hylke Vandenbussche, 2011. "Verti-zontal Differentiation in Monopolistic Competition," Development Working Papers 322, Centro Studi Luca d'Agliano, University of Milano, revised 17 Oct 2011.
    17. Hideo Konishi, 2004. "Uniqueness of User Equilibrium in Transportation Networks with Heterogeneous Commuters," Transportation Science, INFORMS, vol. 38(3), pages 315-330, August.
    18. Patrick Bajari & Lanier Benkard, 2001. "Discrete Choice Models as Structural Models of Demand: Some Economic Implications of Common Approaches," Working Papers 01016, Stanford University, Department of Economics.
    19. Rim Lahmandi-Ayed, 2007. "Finiteness property with vertical and horizontal differentiation: does it really matter?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(3), pages 531-548, December.
    20. Wilbert Grevers & Anne Veen Van Der, 2006. "Optimal Land Use and the Allocation of Endogenous Amenities," ERSA conference papers ersa06p522, European Regional Science Association.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:53:y:2005:i:2:p:265-297. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.