Skip to main content
Log in

A model of the dynamics of the market of COTS software, in the absence of new entrants

  • Published:
Information Systems Frontiers Aims and scope Submit manuscript

Abstract

This work proposes a simple model to simulate the dynamics of the market related to COTS software products, when there are no new entrants. The model takes in explicit account the interactions between products. The model uses a set of random variables, as the initial condition, to simulate the time evolution. The results of the simulations predict the emergence of monopolies, when the interactions between products are significant, and of open markets, when they are limited. The model is validated, by comparing the results of the simulation with the well established observations related to software markets and by comparing the resulting distribution of COTS software products with real data on the software market, which was provided by PC Data Inc.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Aksit, M., Marcelloni F., Tekinerdogan B., van den Berg, K., & van den Broek, pp. (1997). Active software artifacts. In J. Bosch & S. Mitchell (Eds.), Object-oriented technology (pp. 307–310, LNCS 1357). Berlin Heidelberg New York: Springer.

    Google Scholar 

  • Baker, J. B., & Bresnahan, T. F. (1988). Estimating the residual demand curve facing a single firm. International Journal of Industiral Organization, 6, 283–300.

    Article  Google Scholar 

  • Boehm, B. W. (1981). Software engineering economics. Englewood Cliffs, NJ: Prentice Hall.

    Google Scholar 

  • Bollobas, B. (1985). Random graphs. London: Academic.

    Google Scholar 

  • Dasgupta, C. G., Dispensa, G. S., & Ghose, S. (1994). Comparing the predictive performance of a neural network model with some traditional market response models. International Journal of Forecasting, 10.

  • Economides, N. (1996). The economics of networks. International Journal of Industrial Organization, 16(4).

  • Economides, N. (1999). Competition and vertical integration in the computing industry. In J. A. Eisenach & T. M. Lenard (Eds.), Competition, innovation, and the role of antitrust in the digital marketplace. Norwell, MA: Kluwer.

    Google Scholar 

  • Economides, N. (2000). Durable goods monopoly with network externalities with application to the PC operating systems market. Quarterly Journal of Electronic Commerce, 1(3).

  • European Community (1991). Directive on the legal protection of computer programs.

  • Gandal, N. (1994). Hedonic price indexes for spreadsheets and an empirical test for network externalities. RAND Journal of Economics, 25, 160–170.

    Article  Google Scholar 

  • Garcia-Diaz, A., & Phillips, D. T. (1995). Principles of experimental design and analysis. London: Chapman & Hall.

    Google Scholar 

  • Kaniovski, Y., Narduzzo, A., Rossi, A., Taufer, E., & Zaninotto, E. (1999). Diffusion of technologies via economic agents with heterogeneous decision rules. Proceedings of the 4th International Workshop on Economics with Heterogeneous Interacting Agents. Genova, Italy.

  • PC Data Inc. (1998). June 1998 retail software report. http://www.PC Data.com/.

  • PC Data Inc. (1999). January 1999 retail software report. http://www.PC Data.com/.

  • Peter, J. P., & Olson, J. C. (1998). Consumer behavior and marketing strategy. New York: McGraw-Hill.

    Google Scholar 

  • Positive Support Review (2000). Browser market share study. http://www.psrinc.com/.

  • Schroeder, M. (1992). Fractals, chaos, power laws: Minutes from an infinite paradise. Nashville, TN: Freeman.

    Google Scholar 

  • Shapiro, C., & Varian, H. R. (1998). Information rules: A strategic guide to network economy. Boston, MA: Harvard Business School Press.

    Google Scholar 

  • Steen, F., & Salvanes, K. G. (1999). Testing for market power using a dynamic oligopoly model. International Journal of Industrial Organisation, 17(1), 147–177.

    Article  Google Scholar 

  • Weil, N. (1999). Sun to offer Star Division office apps for free. Inforworld, 8/31, http://www.infoworld.com/cgi-bin/displayStory.pl?990831.pistarportal.htm.

  • Westrap, F. V., & Wendt, O. (2000). Diffusion follows structure-a network of the software market. Proceedings of the 33rd Hawaii International Conference on System Sciences.

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Giancarlo Succi.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Marchesi, M., Succi, G. & Russo, B. A model of the dynamics of the market of COTS software, in the absence of new entrants. Inf Syst Front 9, 257–265 (2007). https://doi.org/10.1007/s10796-007-9025-8

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10796-007-9025-8

Keywords

Navigation