nep-net New Economics Papers
on Network Economics
Issue of 2005‒04‒30
three papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Software houses: Changing from Product vendors into solution Providers By Stefan Heng
  2. Competition between open-source and proprietary organizations By Alex Gaudeul
  3. The Role of Europeanisation in the Larger Context of Globalisation By Supreena Narayanan

  1. By: Stefan Heng (Deutsche Bank)
    Abstract: Integrating hitherto separate IT systems while keeping within with tight budgetary restrictions is becoming the dominant software trend in this decade. Optimism is currently starting to spread again in software houses. However, there are marked regional differences in potential. Contrary to some forecasts, the US software houses are in the process of consolidating their already dominant position in the global market thanks to their economies of scale, combined with the network effect. Conversely, the only chance for most of their typically small European competitors to score points is in certain niches of the market.
    Keywords: system software, application software, CRM, ERP, SCM, Web services
    JEL: L15 L81 O14 O33
    Date: 2005–04–22
  2. By: Alex Gaudeul (University of East Anglia - Norwich & ESRC Centre for Competition Policy)
    Abstract: This paper models the competition between two production models: open- source and proprietary. An open-source and a proprietary project are put into competition. The open-source organization suffers from imperfect coordination between its volunteers and it will serve their needs in preference to those of the broader population. Commercial ventures are better coordinated and their user-orientation will lead them to develop better interfaces with users. However, open-source products are free, while an entrepreneur must pay its workers and will maximize profits by excluding some users though price. The paper derives conditions which determine the nature and size of the market for each type of product. Network effects encourage better coordination in open-source production and may deter the emergence of a proprietary alternative. Proprietary entrepreneurs specialize into niche markets when network effects are low, and compete directly with open- source products when network effects are high.
    Keywords: Open Source Software; Network Externalities; Information Goods; Intellectual Property; Duopoly; Production Systems; Competition; Non-Profit; Volunteer Organizations.
    JEL: D23 H41 L13 L22 L31 L86 O34 O38
    Date: 2005–04–25
  3. By: Supreena Narayanan (Institute of International Business IIB ,Stockholm School of Economics)
    Abstract: Europeanisation has emerged as a significant world order because of the magnitude of changes it has brought about in terms of the construction, diffusion of formal as well as informal rules and regulations pertaining to politics, economy, technology and international relations within the European Union. The benefits of Europeanisation as consolidated and enforced by the formation of the European Union are numerous inclusive of: • Unification of a vast majority of constituent European economies territorially, politically and economically. • Stronger, simplified and more effective political control of a vast majority of European countries • A more wholesome sense of Corporate and Social Responsibility for a larger area in terms of corporate governance, environmental protection measures and pollution control. • Creation of stable democratic countries on behalf of the individual European Countries, an essential pre-requisite for individual countries becoming part of the European. • An efficient and streamlined decision making for a fair and prosperous European Union. This paper analyses Europeanisation concerning its integration with EU politics and internal politics of EU countries, its relationship with firms as well as its interplay with Globalisation. European states - members and non-members of the EU - remain challenged by the important and still unsolved question about how future policies of the EU should be considered vis a vis globalisation. While Europeanisation will further strengthen globalisation pressures it also permits the EU exhibiting great potential to emerge as a well-networked and strong system of regional governance.
    JEL: P Q Z
    Date: 2005–04–25

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