nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2007‒05‒12
six papers chosen by
Walter Frisch
University Vienna

  1. Open Source Software Development, Innovation, and Coordination Costs By Thierry Warin; Jean-Philippe Bonardi
  2. Information and Communications Technology in Chronic Disease Care: Why is Adoption So Slow and Is Slower Better? By Michael C. Christensen; Dahlia Remler
  3. Estimating hedonic price indexes for personal computers in russia: Case of Yekaterinburg By Parkhomenko, Alexander; Redkina, Anastasia; Maslivets, Olga
  4. Bias and Size Effects of Price-Comparison Search Engines: Theory and Experimental Evidence By Aurora García-Gallego; Nikolaos Georgantzís; Pedro Pereira; José C. Pernías-Cerrillo
  5. Networks, Standards and Intellectual Property Rights By Vitor Trindade; Johannes Moenius
  6. Political institutions and the development of telecomunications By Veneta Andonova; Luis Díaz-Serrano

  1. By: Thierry Warin; Jean-Philippe Bonardi
    Abstract: Open source is often presented as a very promising governance structure for the development of software in the Internet world. One of its greatest advantages is that it enables and integrates the flow of innovation coming from many unrelated developers. We extend previous inquiries by showing that, due to information communication problems, this governance structure is in fact more efficient for the development of incremental innovations rather than radical innovations. Implications are drawn in terms of the future of the open source system, the economics of innovation and public policy.
    Date: 2007–01
  2. By: Michael C. Christensen; Dahlia Remler
    Abstract: Unlike the widespread adoption of information and communications technology (ICT) in much of the economy, adoption of ICT in clinical care is limited. We examine how a number of not previously emphasized features of the health care and ICT markets interact and exacerbate each other to create barriers for adoption. We also examine how standards can address these barriers and the key issues to consider before investing in ICT. We conclude that the ICT market exhibits a number of unique features that may delay or completely prevent adoption, including low product differentiation, high switching costs, and lack of technical compatibility. These barriers are compounded by the many interlinked markets in health care, which substantially blunt the use of market forces to influence adoption. Patient heterogeneity also exacerbates the barriers by wide variation in needs and ability for using ICT, by high demands for interoperability, and by higher replacement costs. Technical standards are critical for ensuring optimal use of the technology. Careful consideration of the socially optimal time to invest is needed. The value of waiting in health care is likely to be so much greater than in other sectors because the costs of adopting the wrong type of ICT are so much higher.
    JEL: I1 I10 I11 I18
    Date: 2007–05
  3. By: Parkhomenko, Alexander; Redkina, Anastasia; Maslivets, Olga
    Abstract: Economists have been noting for decades that Consumer Price Index (CPI) in the developed countries is overstating inflation by 0,5−2,0% per year. A significant part of the bias is due to the presence of technology products and differentiated products in the CPI basket. An increase share of these products in the Russian CPI may also lead to a substantial upward bias. Nowadays hedonic indices are believed to be the most efficient way to reduce this bias. They can be used in two ways: to estimate the bias in CPI and to elaborate alternative official price indices for information and communication technology (ICT) products. We estimate a 25% fall in the price of personal computers for 20 months (03.04-11.05) using this method. A 25−44% upward bias in price index for PC in Russia was also calculated. We have found that the Russian CPI could be upward biased by 0,18-0,32% per year due to new goods and quality change effects for PC (given 1% expenditure share).
    Keywords: CPI; price index; hedonic price index; CPI bias
    JEL: E31 C43
    Date: 2007–01–05
  4. By: Aurora García-Gallego (Universitat Jaume I); Nikolaos Georgantzís (Universitat Jaume I); Pedro Pereira (Autoridade da Concorrência); José C. Pernías-Cerrillo (Universitat Jaume I)
    Abstract: This article, analyzes the impact on consumer prices of the size and bias of price comparison search engines. we develop a model, related to Burdett and Judd (1983) and Varian (1980), and test experimentally several theoretical predictions. The experimental results confirm the model’s predictions regarding the impact of the number of firms, and the type of bias of the search engine, but reject the model’s predictions regarding changes in the size of the index.
    Keywords: Search engines, incomplete information, biased information, price levels, experiments.
    JEL: C91 D43 D83 L13
    Date: 2007–02
  5. By: Vitor Trindade (Department of Economics, University of Missouri-Columbia); Johannes Moenius
    Abstract: This paper reviews issues that lie at the intersection between intellectual property rights (IPR) and network effects, especially in the context of the global economy. Some of the relevant questions are: (1) How do IPR influence the provision of goods exhibiting network effects? (2) How do network effects in turn influence the creation of intellectual property? And (3) how do aspects of the global economy interact with both IPR and network effects? We synthesize what is known from the existing literature to answer these questions.
    Keywords: Intellectual Property Rights, Network Effects, Globalization, Standards, Social Networks, Software Piracy
    JEL: D85 F12 F13 F14 L14 O34
    Date: 2007–03–27
  6. By: Veneta Andonova (Department of Bussines, Universidad de los Andes); Luis Díaz-Serrano (Grup de Recerca en Economia del Benestar (CREB-GRIT-IZA), Departament d'Economia, Universitat de Barcelona)
    Abstract: It has traditionally been argued that the development of telecommunications infrastructure is dependent on the quality of countries’ political institutions. We estimate the effect of political institutions on the diffusion of three telecommunications services and find it to be much smaller in cellular telephony than in the others. By evaluating the importance of institutions for technologies rather than for industries, we reveal important growth opportunities for developing countries and offer policy implications for alleviating differences between countries in international telecommunications development.
    Keywords: Political constraints, Telecommunications, GMM, Economic development.
    JEL: E32 R10
    Date: 2006–12

This nep-ict issue is ©2007 by Walter Frisch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.