Economides N. and Katsamakas E. 2006. Linux vs. Windows: A comparison of application and platform innovation incentives. In The Economics of Open Source Software Development, Bitzer J. and Schroder P. (eds.), Elsevier Press, 207-218.

Economides Nicholas and Evangelos Katsamakas

Abstract: This chapter analyzes and compares the investment incentives of platform and application developers for Linux and Windows. We find that the level of investment in applications is larger when the operating system is open source rather than proprietary. The comparison of the levels of investment in the operating systems depends, among others, on reputation effects and the number of developers. The chapter also develops a short case study comparing Windows and Linux and identifies new directions for open source software research. 

Insights: (a) Level of investment in applications is larger when the operating system is open source, in other words an open source operating system leads to higher quality applications. (b) Level of investment in the operating system depends on the specifics; so there is a trade-off between investment in applications and investment in the operating system.

Keywords: Open Source Software, operating systems, technology platforms, Linux, innovation incentives.