Economic analysis of microcomputer hardware

Abstract

Economic analysis of the hardware characteristics of the personal computer segment of the microcomputer market indicates that the variables that most affect cost are the bundle of attributes offered by the micros. Interestingly, certain technological characteristics found to be important explanatory variables for cost in larger computers were not found to be significant for micros.

Understanding Network Effects in Software Markets: Evidence from Web Server Pricing

“…Early attempts at modeling the behavior of information technology markets (e.g., workstations) have focused on evaluating the relationship between product features (e.g., processor speed and memory) and price (Lynch, et al, 1990;Michaels, 1979;Rao and Lynch, 1993). However, some products or services become more valuable as more people use them.…”

“…This approach assumes that attribute bundles can be appropriately quantified. It has been used successfully in several studies of IT pricing (Lynch, et al, 1990;Rao and Lynch, 1993) prior to its inclusion in network externalities studies in IT markets (Brynjolfsson and Kemerer, 1996;Gandal, 1994;Gandal, 1995).…”

Hedonic price analysis of workstation attributes

“…Independent variables include various computer characteristics ranging from purely hardware attribtites stich as speed, main memory and mass storage to variables such as year of introduction and measures of hardware compatibility. (For an in-depth review of prior research in this area, see [17]). …”

“…A difficulty arises here, since all functional representations appear to fit the relevant data well. Yet no formal tnethod has been used in the literature on the economics of computers (except for [17]) for determining which functional form best represents the price-performance characteristics of computers.…”

“…For example, Zarembka [25] discriminates between linear and logarithmic forms by testing the hypothesis HO: A = 0. (For more details of the Box-Cox methodology, see [4,17]). …”