The Impact of Entry and Competition by Open Source Software on Innovation Activity

This paper presents the stylized facts of open source software innovation and provides empirical evidence on the impact of increased competition by OSS on the innovative activity in the software industry. Furthermore, we introduce a simple formal model that captures the innovation impact of OSS entry by examining a change in market structure from monopoly to duopoly under the assumption that software producers compete in technology rather than price or quantities. The paper identifies a pro-innovative effect of OSS competition.open source software, innovation, strategic interaction

Migration Regulation Contagion

This paper examines the political economy of a selective immigration policy in a model with incomplete information on the characteristics of migrants. We address two questions: First, how does a selective immigration policy affect the number of immigrants which is admitted by the receiving country, and second, how does a selective immigration policy in one country affect immigration policies in other countries. We find (i) that countries with selective immigration policies ceteris paribus tend to admit more migrants than countries without such policies, and (ii) that neighboring countries will follow each other in implementing selective immigration policies. These theoretical findings are supported by evidence from an econometric panel analysis of immigration policies in 15 OECD countries in the period from 1980 to 2005.International migration; political economy of migration; skill-selective immigration policies

The Impact of Entry and Competition by Open Source Software on Innovation

No abstractNo keywords;

Fixed Export Cost heterogeneity, Trade and Welfare

Recent literature on the workhorse model of intra-industry trade has explored heterogeneous cost structures at the firm level. These approaches have proven to add realism and predictive power. This paper presents a new and simple heterogeneous-firms specification. We develop a symmetric two-country intra-industry trade model where firms are of two different marginal costs types and where fixed export costs are heterogeneous across firms. This model traces many of the stylized facts of international trade. However, we find that with heterogeneous fixed export costs there exists a positive bilateral tariff that maximizes national and world welfare.Intra-industry trade, trade liberalization, monopolistic competition, heterogeneous firms,welfare, protectionism

Welfare Effects of Tariff Reduction Formulas

WTO negotiations rely on tariff reduction formulas. It has been argued that formula approaches are of increasing importance in trade talks, because of the large number of countries involved, the wider dispersion in initial tariffs (e.g. tariff peaks) and gaps between bound and applied tariff rates. This paper resents a two country intra-industry trade model with heterogeneous firms subject to high and low tariffs. We examine the welfare effects of applying three different tariff reduction formulas proposed in the literature i) a proportional cut, ii) the Swiss formula and iii) a compression formula. No single formula dominates for all conditions. The ranking of the three tools depends on the degree of product differentiation in the industry, and the achieved reduction in the average tariff.Welfare, monopolistic competition, intra-industry trade, wto trade liberalization, formula approaches

Reductions in Real versus Tariff Barriers: The Effects on Industry Concentration

Economic integration in Europe has had ambiguous effects on industry concentration. The literature has proposed various explanations of the empirical findings. The present paper provides an additional theoretical argument. We show that in a world of monopolistic competition, integration in it self (modelled as a reduction of trade barriers) generates opposing effects on industry concentration, depending on wether the barrier is a real (frictional) or a tariff cost. In particular, the Herfindahl index of industry concentration falls for a reduction in real costs, but rises for a reduction in tariff costs. The reason is that real barriers burn up resources, such that industry profitability is reduced, reducing entry, and resulting in fewer firms and higher concentration. Under a tariff barrier, the redistributed tariff revenue stabilises industry profitability, resulting in more firms and lower concentration.real costs; tariff costs; industry concentration; market structure; integration

On Privatisation and Restructuring

This essay deals with the issues of privatisation and restructuring in transition economies. The topics are addressed in both a descriptive and empirical manner. The centre of the analysis is the interrelation of privatisation, the resulting ownership form and the expected and actual effect on restructuring behaviour of firms. The essay identifies a slow progress in privatisation, paired with an overweight of insider owners. Furthermore substantial evidence on slow restructuring is collected. Overmanning and excessive social assets prevail in the privatised firms - in part regardless of the new ownership structure. Finally, the link to the government’s fiscal situation is drawn, the costs of restructuring to the government budget are identified. In presenting such account of the privatisation and restructuring situation, the essay provides a basis for formal explanations of slow privatisation and sluggish restructuring.Privatization; Restructuring; Transition; Central adn Eastern Europe

Intrinsic Motivation in Open Source Software Development

This papers sheds light on the puzzling evidence that even though open source software (OSS) is a public good, it is developed for free by highly qualified, young and motivated individuals, and evolves at a rapid pace. We show that once OSS development is understood as the private provision of a public good, these features emerge quite naturally. We adapt a dynamic private-provision-of-public-goods model to reflect key aspects of the OSS phenomenon. In particular, instead of relying on extrinsic motives (e.g. signaling) the present model is driven by intrinsic motives of OSS programmers, such as user- programmers, play value or 'homo ludens' payoff, and gift culture benefits. Such intrinsic motives feature extensively in the wider OSS literature and contribute new insights to the economic analysis.open source software, public goods, homo ludens, war of attrition

Intrinsic Motivation versus Signaling in Open Source Software Development

This papers sheds light on the puzzling fact that even though open source software (OSS) is a public good, it is developed for free by highly qualified, young, motivated individuals, and evolves at a rapid pace. We show that when OSS development is understood as the private provision of a public good, these features emerge quite naturally. We adapt a dynamic private-provision-of-public-goods model to reflect key aspects of the OSS phenomenon. Apart from extrinsic motives (namely signaling), the present model also contains intrinsic motives of OSS programmers, such as play value or homo ludens payoff, userprogrammers’ and gift culture benefits. Such intrinsic motives feature extensively in the wider OSS literature and contribute new insights to the economic analysisopen source software; public goods; homo ludens; war of attrition

International migration with heterogeneous agents: theory and evidence

"Two puzzling facts of international migration are that only a small share of a sending country's population emigrates and that net migration rates tend to cease over time. This paper addresses these issues in a migration model with heterogeneous agents that features temporary migration. In equilibrium a positive relation exists between the stock of migrants and the income differential, while the net migration flow becomes zero. Consequently, empirical migration models, estimating net migration flows instead of stocks, may be misspecified. This suspicion appears to be confirmed by our empirical investigation of cointegration relationships of flow and stock migration models." (author's abstract)Zwei verwirrende Fakten der internationalen Wanderung sind, dass nur ein kleiner Teil der Bevölkerung der Auswanderungsländer emigriert und dass die Migrationsquoten mit der Zeit kleiner werden. Der Beitrag untersucht dieses Phänomen unter Zuhilfenahme eines Migrationsmodells mit heterogenen Agenten für die temporäre Migration. Im Gleichgewicht existiert eine positive Relation zwischen der Anzahl der Migranten und dem Einkommensdifferential, während der Nettomigrationsfluss versiegt. Infolge dessen sind empirische Migrationsmodelle, die sich auf Nettomigrationsflüsse anstatt auf den Bestand an Migranten beziehen, missspezifiziert. Diese Vermutung scheint sich durch die empirische Untersuchung der Kointegrationsbeziehungen von Fluss- und Bestands-Migrationsmodellen zu bestätigen. (IAB