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Government Policies Supporting Open Source Software for the Mass Market

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  • Stefano Comino

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  • Fabio Manenti

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Abstract

This paper analyzes the impact on social welfare of government policies supporting open source software (OSS). Mass-market consumers can be divided between those who are informed about the existence of OSS and those who are uninformed. Since OSS producers have little incentive to advertise, there may be a substantial mass of uniformed consumers, leading to market failures that may justify government intervention. We study three government policies: (a) mandated adoption, whereby the government forces public agencies, schools, and universities to adopt OSS, (b) information provision, whereby the government informs the uninformed users about the existence and the characteristics of OSS, and (c) subsidy, whereby the government makes a payment to consumers if they adopt OSS. We show that mandated adoption and information provision may increase social welfare, but the subsidy always reduces it. When network externalities are added to the model, we show that mandated adoption and information provision may increase social welfare if they help the market to tip towards standardization. Copyright Springer 2005

Suggested Citation

  • Stefano Comino & Fabio Manenti, 2005. "Government Policies Supporting Open Source Software for the Mass Market," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 26(2), pages 217-240, December.
  • Handle: RePEc:kap:revind:v:26:y:2005:i:2:p:217-240
    DOI: 10.1007/s11151-004-7297-4
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    File URL: http://hdl.handle.net/10.1007/s11151-004-7297-4
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    References listed on IDEAS

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    1. Josh Lerner, 2005. "The Scope of Open Source Licensing," Journal of Law, Economics, and Organization, Oxford University Press, vol. 21(1), pages 20-56, April.
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    Citations

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    Cited by:

    1. Mourad Zeroukhi & Thierry Pénard, 2014. "Open source software subsidies and network compatibility in a mixed duopoly," Economics Bulletin, AccessEcon, vol. 34(2), pages 1174-1184.
    2. Gauguier, Jean-Jacques, 2009. "L’industrialisation de l’Open Source," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/4388 edited by Toledano, Joëlle.
    3. Alexia Gaudeul, 2008. "Consumer Welfare and Market Structure in a Model of Competition Between Open Source and Proprietary Software," Working Papers 08-31, Centre for Competition Policy, University of East Anglia.
    4. Stefano Comino & Fabio M. Manenti & Maria Laura Parisi, 2005. "From Planning to Mature: on the Determinants of Open Source Take Off," Department of Economics Working Papers 0517, Department of Economics, University of Trento, Italia.
    5. Christopher Snyder, 2005. "Introduction to the 2004 International Industrial Organization Conference Special Issue," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 26(2), pages 145-146, December.
    6. Nicholas Economides & Evangelos Katsamakas, 2005. "Linux vs. Windows: A comparison of application and platform innovation incentives for open source and proprietary software platforms," Working Papers 05-07, NET Institute.
    7. Lakka, Spyridoula & Stamati, Teta & Michalakelis, Christos & Anagnostopoulos, Dimosthenis, 2015. "Cross-national analysis of the relation of eGovernment maturity and OSS growth," Technological Forecasting and Social Change, Elsevier, vol. 99(C), pages 132-147.
    8. Marina Doroshenko & Kirill Skripkin, 2013. "Developing the National Software Market: Public Policy Alternatives," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 7(1), pages 44-57.
    9. repec:ste:nystbu:05-11 is not listed on IDEAS
    10. German Lambardi, 2009. "Software Innovation and the Open Source threat," Working Papers 09-15, NET Institute, revised Sep 2009.
    11. Harald Schmidbauer & Mehmet Gencer & Bulent Ozel & V. Sinan Tunalioglu, "undated". "Public Policies in the Software Market: Regional Issues Concerning Open Source Software," EcoMod2007 23900082, EcoMod.
    12. Dongryul Lee & Byung Kim, 2013. "Motivations for Open Source Project Participation and Decisions of Software Developers," Computational Economics, Springer;Society for Computational Economics, vol. 41(1), pages 31-57, January.
    13. Lakka, Spyridoula & Michalakelis, Christos & Varoutas, Dimitris & Martakos, Draculis, 2012. "Exploring the determinants of the OSS market potential: The case of the Apache web server," Telecommunications Policy, Elsevier, vol. 36(1), pages 51-68.
    14. Gaudeul, Alexia, 2008. "Open Source Licensing in Mixed Markets, or Why Open Source Software Does Not Succeed," MPRA Paper 19596, University Library of Munich, Germany.

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