Posts Tagged ‘ESOP’

The association ESOP from Portugal made available two papers of original research. They concern what they call an “artificial exclusion of Linux-based laptops”. I had the opportunity to see the study earlier. Both studies can be freely accessed from ESOP. It is not easy to calculate economic effects but ESOP applies their own innovative approach for calculating losses.

The first study analyses the national economic impacts of introducing a series of locally-assembled laptops with an Open Source system and applications. This study measures the effects on GDP, employment, trade balance and discretionary income. The idea had a previous successful try-out in a government project called e.iniciativas, where the debuting Linux laptop achieved a 10% market share. Later on, despite several attempts, Portuguese retailers were altogether unwilling to supply identical laptop solutions, when the e.iniciativas experience had clearly established that such products would be in demand.

The second study analyses this market behaviour, which is typical of retail oligopolies. The analysis derives a probability model for retail markets and addresses several malfunctioning phenomena in the frame of the existing European legislation for competition. This model can be applied to other markets where the imbalance between production and distribution control is felt and where distribution is highly concentrated.

They find the current market organization unpleasant:

The theoretical basis allows for the identification of two critical issues:

1) a small number of intervening parties holds the power to choose which products become available for millions of citizens

2) different degrees of decision-coupling between parties may show within an oligopoly

This matter has been neglected by our national Competition Authority and apparently not corrected by European institutions.

ESOP.pt may trigger an entertaining debate with their papers.


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