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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/28455
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| Title: | Network Effects, Switching Costs, and Underlying Preferences in
Operating Systems for Servers: A Case of Linux vs. Windows |
| Authors: | Seung-Hyun Hong, University of Illinois
Leonardo Rezende, PUC-Rio and University of Illinois |
| Issue Date: | 2006 |
| Series/Report no.: | NET Institute Working Paper;06-12 |
| Abstract: | We seek to investigate to what extent network effects and switching
costs affect the decision to adopt Linux or Windows as the operating
system for computer servers. To this end, we use detailed survey data of
over 100,000 establishments in the United States. To account for
unobserved preferences for either operating system, we employ recently
developed dynamic discrete choice panel data methods (Arellano and
Carrasco 2003). The results from our empirical analysis suggest that
among network effects, switching costs, and unobserved preferences, the
last two are important factors in the market for operating systems for
servers. We find that switching costs are significant, but can be
severely overestimated by methods that do not account for unobserved
heterogeneity in establishment-specific tastes for operating systems. We
also find that once taste heterogeneity is taken into account, network
effects are not significant. |
| URI: | http://hdl.handle.net/2451/28455 |
| Appears in Collections: | NET Institute Working Papers Series
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